For a long time, the very idea of the arrival of an eleventh team in Formula 1 made people cringe. When Andretti tried to defend his candidacy, the ten teams already present in the discipline showed fierce opposition for economic reasons, in particular. Indeed, the arrival of a new team meant that the teams would share the cake – that is to say revenue and TV rights – into eleven, and no longer into ten. Not to mention the valuation of already existing teams which, inevitably, would lose value with the introduction of a new team.
Arguments which, initially, were sufficient for the FOM to refuse Andretti's entry at the start of 2024. Finally, a few months later, Formula 1 gave in and accepted the arrival of… Cadillac and General Motors from 2026, with the Andretti mention erased, in the face of the arguments of the American group and its promise to design its own powertrain by 2028. In addition, in order to convince the FOM, Cadillac has had to pay an anti-dilution tax – designed to compensate for the indirect loss of money from the ten other teams – of around $450 million, much more than the $200 million included in the Concorde Agreement.
« For now, we are losing”
A sum still not sufficient, according to Toto Wolff. The Mercedes Team Principal believes that this entry ticket into Formula 1 is not high enough and that the sum of 450 million dollars – which will be divided into ten to be distributed to the ten other teams – does not compensate for the related losses when Cadillac arrives in 2026. “For now, we are losing, he told German media Auto Motor und Sport. We don't know what Cadillac will invest in Formula 1. The anti-dilution tax, currently set at $450 million, is too low. It does not compensate for the direct loss of income. »
“Only time will tell us what value the sport will derive from the presence of an eleventh team, concedes the Austrian manager, who hopes that Cadillac will bring freshness and therefore interest to Formula 1. If the value of sport increases, everyone will benefit. But we don't know that yet. If Cadillac now commits to a factory team and invests a proper marketing budget in Formula 1, it will be a valuable asset to the sport. »
-However, at present, Mercedes is not to be complained about: according to Sportico, the German team is valued at nearly four billion dollars and made $142 million in profit for the 2023 financial year. Toto Wolff assures that Formula 1 has never been as profitable as it is today. “We are making solid profits. Our profit margin is 30 to 35% before taxes, which even offsets our engine expenses.explains the senior director of Mercedes. The old cliché that Formula 1 is just a money pit is now a thing of the past. In summary, Formula 1 has never been as financially healthy as it is today. »
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