The price of F1’s US success
Antitrust investigation hangs over F1
Formula One is back. The season break is over and racing teams are gearing up for the Dutch Grand Prix on Sunday, but troubles are brewing off the track, far away in the US, where antitrust authorities are investigating
Since acquiring F1 in an $8bn deal in 2017, Liberty Media, the US group chaired by billionaire John Malone, has elevated the sport’s profile by focusing on personalities rather than just the technical aspects of racing, notably through Netflix’s Drive to Survive series.
As readers of Scoreboard know, those efforts have paid off handsomely in the US, a country where F1 long struggled to gain traction.
These days, American celebrities flock to grand prix races not only in Austin, but in Miami and Las Vegas too. Advised by Lewis Hamilton and backed by Apple, Brad Pitt is starring in an upcoming F1 film. US sponsors, from Google to Goldman Sachs, have flocked to the sport.
But one American wasn’t welcomed with open arms. Michael Andretti, a member of the US racing dynasty, was rejected by F1 in January after applying to add a new team to the grid. Andretti, whose father won the F1 championship, is backed by Guggenheim Partners chief Mark Walter’s Group 1001 and had already met “stringent criteria” set by the Fédération Internationale de l’Automobile, which governs the sport.
“Our assessment process has established that the presence of an 11th team would not, in and of itself, provide value to the Championship,” F1 said in January. “The most significant way in which a new entrant would bring value is by being competitive. We do not believe that the applicant would be a competitive participant.”
Some existing F1 teams have concerns about the financial impact of splitting revenues with an 11th member of the grid. One argument is that Andretti should just buy an existing team so as not to dilute revenues, while F1 has left the door open for an entry in 2028 rather than 2026.
But scrutiny has ramped up. Earlier this month, Liberty Media disclosed that the US Department of Justice’s antitrust division is investigating “Formula 1’s conduct concerning the application by Andretti Formula Racing to enter the FIA Formula One World Championship”.
“We intend to fully co-operate with this investigation, including any related requests for information”, Liberty Media chief Greg Maffei told analysts this month. “We believe our determination, F1’s determination, was in compliance with all applicable US antitrust laws, and we’ve detailed the rationale for our decision vis-à-vis Andretti in prior statements,” he said.
“We are certainly not against the idea that any expansion is wrong,” he said. “And we’re certainly open to new entrants making applications and potentially being approved if those requirements are met.”
Just a few years ago, F1 was fighting for attention in the US. Now, the sport’s owners might have a little too much.