Andretti, another wall from F1
The 2024 season has not started, but the controversies are already very strong. In fact, today the official exclusion of the team arrived Andretti, which had applied starting from 2025 or 2026: Formula 1 considered that the US team did not represent added value for the championship and did not provide guarantees of competitiveness. This is a simplified explanation to the minimum terms of a broad statement that traces the history of Andretti's candidacy and the reasons for the FOM's no. Here it is in full form.
Andretti, the full press release from F1
[Introduzione] “1. On 22 March 2023, the FIA published an invitation to apply to participate in the FIA Formula 1 World Championship, in which four candidates responded, including Andretti Formula Racing, LLC. The FIA conducted an initial assessment process, which included a written question and answer element and an in-person meeting“.
“2. On 2 October 2023 the FIA announced that it had determined that the application submitted by Andretti met the selection criteria in all material respects; as a result, the FIA considered that the Candidate should proceed to the next stage of the agreed process, as set out in the invitation, i.e. an assessment by the commercial rights holder (FOM, ed.) of Andretti's value for the Championship. The procedure established in the invitation provides that both the FIA and the FOM must deem an application suitable in order to select a new competitor“.
“3. The FIA had previously shared with us the materials submitted by each of the four applicants in response to the invitation, which we had reviewed. Following the FIA's announcement, we wrote to Andretti on 10 October 2023, outlining the evaluation process and the details of the considerations and decision-making process under which we would conduct our business assessment. This trial contained a list of questions for Andretti, which Andretti answered on October 24, 2023“.
“4. Having had the opportunity to consider Andretti's responses and our decisions, we wrote to Andretti on December 12, 2023, inviting him to a meeting in person to our offices to submit your application, but Andretti did not accept the offer“.
“5. This document summarizes our review process and the key conclusions that arose from it“.
[Processo di Revisione]: “6. As set out in the Letter of Procedure, we have taken into account the wide range of ways in which value can be added, including value for fans, the prestige and reputational value of the sport, the balance of the championship and the objectives of sport sustainability. The main areas of analysis were: a) consideration of the likely competitiveness of Andretti's entry and its impact on value (of the championship, ed.); b) consideration of the Andretti agreements regarding supply of Power Units and the impact such agreements would have on Andretti's competitive performance; c) one research into the potential benefits that Andretti can provide in terms of fan growth and involvement, as well as a review of equivalent materials prepared by C|T Group on behalf of Andretti; d) consultation with key stakeholders to understand their perspective on the value Andretti would bring; And) consideration of the operational impact on our existing circuits of the addition of an 11th team; f) consideration of the probable impact of Andretti's entry on FOM's financial results as an indicator of value; g) consideration of Andretti's financial sustainability based on the materials provided“.
“7. Our assessment did not involve any consultation with current F1 teams. However, when considering the best interests of the Championship, we have taken into account the impact of the entry of an 11th team on all commercial actors of the Championship“.
[Generale]: “8. Our evaluation process has determined that the presence of an eleventh team would not in itself bring value to the championship“.
“9. Each eleventh team must demonstrate that its participation and involvement will benefit the championship. The most significant way a new entrant would bring value is by being competitive, particularly by competing for podiums and race wins. This would substantially increase fan engagement and increase the value of the championship in the eyes of key stakeholders and revenue sources, such as broadcasters and match organisers.“.
“10. The question involves an association with General Motors which does not initially include a Power Unit supply, with the ambition of a full partnership with General Motors as a Power Unit supplier in due course, but this will not happen for some years. The supply of Power Units by General Motors would have increased the credibility of the candidacy from the beginning, although a novice manufacturer working with a new Power Unit supplier would have faced a significant challenge. Most attempts to establish a new manufacturer in recent decades have been unsuccessful“.
“11. 2025 will be the last year of the current regulatory cycle and 2026 will be the first year of the next cycle, for which a completely different car than the previous cycle will be required. Andretti proposesas a novice builder, to design and build a car to the 2025 regulations and then, the following year, to design and build a completely different car under the 2026 regulations. Furthermore, Andretti proposes to attempt this while depending on a mandatory supply from a rival Power Unit manufacturer that will inevitably be reticent to extend its collaboration with Andretti beyond the minimum required as Andretti pursues its ambition to collaborate with General Motors as a long-term Power Unit supplier, which a mandatory Power Unit supplier would see as a risk to its intellectual property and know-how“.
“12. We do not believe there are grounds for admitting a new candidate in 2025as this would mean that a novice competitor would have to build two completely different cars in the first two years of their life. The fact that Andretti proposes to do so gives us reason to doubt his understanding of the scope of the challenge. While a 2026 entry does not address this specific issue, it is nevertheless true that Formula 1, as the pinnacle of world motor racing, represents a unique technical challenge for manufacturers, of a magnitude that Andretti has faced nowhere else formula or discipline in which he has previously competed, and proposes to do so with a reliance on a mandatory supply of Power Units in the early years of his participation. On this basis, we do not believe that the Applicant would be a competitive participant“.
“13. Entering the sport as a new Power Unit manufacturer is also an enormous challenge, which major car manufacturers have struggled to cope with in the past, and which may require a number of years of significant investment to become competitive. General Motors has the resources and credibility necessary to attempt this challenge, but success is not guaranteed“.
[Conclusioni della valutazione commerciale]: “14. Our evaluation process determined that the presence of an eleventh team would not, in itself, add value to the championship. The most significant way a new entrant would bring value is by being competitive. We do not believe Andretti would be a competitive participant“.
“15. The need for any new team to adopt a mandatory supply of power units, potentially over a period of several seasons, would be detrimental to the prestige and reputation of the league“.
“16. While the Andretti name is recognized by F1 fans, our research indicates that F1 would bring value to the Andretti brand rather than the other way around“.
“17. The addition of an eleventh team would place an operational burden on race organizers, subject some of them to significant costs and reduce the technical, operational and commercial space of other competitors“.
“18. We were unable to identify any expected material positive effect on financial results, as a key indicator of the pure commercial value of the Championship“.
“19. Based on the application in its current form, we do not believe Andretti has proven he can add value to the championship. We conclude that Andretti's application for participation in the championship should not be accepted“.
“20. The Commission would examine differently the request for entry into the 2028 Championship of a team with a General Motors power unit, both as a General Motors works team and as a General Motors customer team designing all permitted components internally. In this case there would be further factors to consider in relation to the value that the applicant would bring to the championship, in particular regarding the entry of a new prestigious manufacturer into the sport as a Power Unit supplier“.
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