The International Automobile Federation (FIA) has seen a sizeable influx of requests to increase the Formula 1 grid beyond the existing count of 10 teams. A highly visible bid by Michael Andretti is rumored to be nearing FIA approval. However, Andretti’s application faces a headwind of opposition from F1, tasked with the final sign-off, and most of the incumbent teams voicing concerns about their prize money allocation diminishments.
In an interview, McLaren‘s CEO, Zak Brown, suggested a financially positive scenario for extant teams. He proposed tripling the current anti-dilution fee of $200 million in line with the 2026 Concorde Agreement. Following this premise, a viable expansion team could be beneficial to the old guard, financially speaking.
Brown, when queried on his stance supporting an eleventh team that would inevitably lead to prize money dilution, retorted, “Because I believe I’m not giving up that money.” He continued underlining the significance of the franchise fee, suggesting it be increased to $700 million. He explained, “The dilution of an 11th team is about 10 million a year. So, if I get 70, it will be covering me for seven years.” Brown perceives this stimulus as generating an additional $700 million in franchise value, inflating his team’s worth from the hypothetical $2 billion to $2.7 billion.
An 11th team would heighten the element of scarcity, with just one spot left for a maximum of twelve teams, thus fueling competition for the now-coveted 12th slot, Brown added. IndyCar veteran Michael Andretti has climbed on board, having rebranded his international racing body to Andretti Global and enlisting American Original Equipment Manufacturer (OEM) General Motors for his F1 enterprise. However, the extent of GM’s involvement remains unclear.
Brown argued that even if GM primarily uses F1 for brand visibility, a slice of its marketing expenditure in the tournament would invariably get funneled to the teams. He noted: “The teams get 70% of the money that comes into the sport. If General Motors comes in and they spend circuit advertising, sponsor a race, let’s say they spend some Paddock Club, they spend 100 million a year, we get 70 of that.”
This would offset some of the $100 million they’d withdraw from the system, thereby reducing the impact of the dilution. Brown remained neutral on Andretti’s bid, stating, “I don’t know enough about Andretti’s bid to have a view on whether they should or shouldn’t [be accepted].” He concluded his point by advocating for anyone ready to pay the increased franchise fee, demonstrate their racing credentials, and provide transparent funding sources, declaring this to be an addition to the sport.