Formula 1 has seen a huge increase in interest from investors looking to enter the sport through new teams or existing competitors.
Greg Maffei, the president and CEO of F1 owner Liberty Media, told an investor conference yesterday the rise in interest was a result of the changes they made after taking over the series in 2017. Soon after the purchase Liberty negotiated a new Concorde Agreement with the teams and FIA, F1’s governing body.
“When we took over, we really had four goals with the new Concorde Agreement,” Maffei explained. “Create more on-track parity through putting a hard cap in. Putting in a less steeply-graded pay-out to the teams so that the bottom teams had a better chance to make more money. We put in a new series of designs which allowed more overtaking and we made the teams franchises so that the 10 had value.”
Maffei said the success of the latter change can been gauged by the fact that a little over six years since F1 last lost a team, the FIA has received interest from several prospective new entries.
“Manor was the 11th team and just before we bought into Formula 1, it went into administration in the UK and got sold for £1,” said Maffei. “The world has changed dramatically.
“Have we achieved everything on our goals? No. But we have achieved an awful lot about bringing parity and about bringing the ecosystem to be healthy and about generating interest. The number of people who call and want to invest in a team, we could fill this room and more.”
In February the FIA opened a process for potential new teams to apply to enter the sport. Under the Concorde Agreement, new entrants are required to pay a $200 million (£160m) ‘anti-dilution’ fee which is shared between the existing competitors.
However F1 CEO Stefano Domenicali indicated that the value of teams has increased by so much that the fee may have to rise accordingly to ensure they are compensated for any loss in earnings if they have to share prize money with additional competitors.
“The evaluation has to be done together to see from the technical perspective, from the sporting perspective, for the financial stability and to make the bigger picture, if a new team will give value to the league, to the sport,” said Domenicali.
“The figure that we’re saying, the so-called anti-dilution payment, was done at $200 million just a couple of years ago – a couple means two years ago – because at that time no one would have expected that the value of this business would have risen up so much.
“Today the situation is totally different, for sure. And it’s our duty to make sure that we protect the business the best way that we can and have a bigger picture.”
While the likes of Andretti have attracted considerable attention to their efforts to enter F1, the series has seen many expressions of interest from those looking to invest in teams, said Domenicali. “Today there’s so many that would like to come.
“There are teams that are more vocal than others. Some others are much more silent, but they are really expressing their interest.
“As always in life, there is someone who has to make that evaluation. We are part of this process and we’re going to do the right thing at the appropriate time during this year.”
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