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Why F1 denied it’s had “serious” discussions over new teams for 2021

2021 F1 season

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Since RaceFans revealed in August that Panthera Asia Team F1 was considering entering the sport there have been reports of further interested parties, including potential teams from Russia and Monaco/Spain.

Indeed, earlier this week a Monegasque entity issued a press release under the heading ‘Getting ready for a new F1 entry – MIM’ and sub-headed ‘Group working at all-Spanish [Campos] team with [Pascal] Wehrlein and [Alex] Palou set to drive in 2021’. The release adds that contact was first taken up with Chase Carey, CEO of F1’s commercial rights holder [CRH] Liberty Media – trading as Formula 1 – in May.

That makes for two confirmed prospects in as many months. According to sources there have been as many as five approaches to F1’s commercial rights holder Liberty Media, although a number of these are thought to have been under different guises.

Perversely, Formula 1’s commercial rights holder seems strangely cool on the idea of larger grids, a stance substantiated by a statement released by Liberty late on Thursday stating that ‘while Formula 1 appreciates their interest, we can confirm that there are no serious discussions with any persons or companies about the admission of a new team’.

Indeed, during the Belgian Grand Prix F1 motorsport manager Ross Brawn said: “I think 10 healthy teams in Formula 1 is actually enough, and if we do get any extra teams they’ve got to really add to the show.”

Yesterday F1 issued a carefully crafted statement in response to the latest expression of interest. Taken at face value, it might be thought to imply none of the prospects were ‘serious’, but what it states is the discussions are held were not ‘serious’.

How could they be if F1 is not serious about attracting new teams? In any constructive discussion, both parties need to be absolutely serious.

The statement is open to another misinterpretation, this being that Formula 1’s commercial rights holder is the sole arbiter on selection or admission of new teams. This is not the case, whether under current or future regulations. The commercial rights holder is responsible for commercial terms while F1’s administrator and governing body, the FIA, is responsible for sporting and technical matters.

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At best, future selection processes could be joint undertakings, bearing in mind that a prospective team cannot participate without an FIA entry, but that teams have previously participated without commercial terms being in place. This was the case in 2013, when Marussia raced without a commercial agreement, and during Haas’s initial races in 2016.

Esteban Gutierrez, Haas, Melbourne, 2016
Haas scored points before it had a commercial deal
Thus, to be absolutely clear, the granting of an F1 entry does not lie (solely) within the gift of Liberty.

In fact, the draft 2021 regulations state teams which failed to score points in the previous year (clearly applicable to new teams) must “supply information about the size of their company, their financial position and their ability to meet their prescribed obligations’, and that applications will be studied by the FIA and accepted or rejected at its absolute discretion.” Not a word about commercial terms.

In effect, by signing up to a commercial agreement, a team competing in the FIA Formula 1 world championship cedes its rights to the CRH. Without a commercial agreement said entity could poses a problem for the CRH, which may not use a team’s image or intellectual property without its express agreement.

A team could argue that without a commercial agreement no footage of its image, cars or intellectual property may be broadcast or marketed. Consider the implications of that, whether deliberately or incidentally: no in-car footage if ‘maverick’ cars are included, not overhead shots, restricted visuals of pit lane and paddock, no televised conferences if participants are members of such a team. The ramifications are endless.

Clearly, F1 needs to ensure the financial health of its current participants, and an additional team(s) will reduce the individual ‘pot’ size as it currently stands unless said team(s) contribute substantially to the overall health of the championship by attracting additional fans, in turn boosting revenues.

There is, of course, another way of increasing ‘pot’ size: Liberty reducing its ‘cut’ in the interests of a healthier F1. Given that Liberty is NASDAQ-listed that is obviously unlikely.

Thus, the decision to not hold ‘serious’ discussions about new teams is not a sporting decision or one motivated by altruistic motives, but driven by purely commercial considerations. Liberty’s statement should be read in that light.

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Author information

Dieter Rencken
Dieter Rencken has held full FIA Formula 1 media accreditation since 2000, during which period he has reported from over 300 grands prix, plus...

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8 comments on “Why F1 denied it’s had “serious” discussions over new teams for 2021”

  1. It would seem F1 set out for a big fish (VW group, or my personal wish FoMoCo), instead caught some minnows on the hook and now want to throw them back in.

    1. Well, to be honest. F1 always attracted a lot of exotical entrepreneurs to say the least, with lots of ideas but a lot less money. Recent Rich energy with its interesting but unrealistic CEO.
      I guess some threshold to enter F1 is not per se a bad thing.

  2. I wonder if liberty is simply not interested because they already have massive issues trying to get the current (big) teams to agree on the new rules for 2021? Aaddition of any new team means that the prize money distribution will become more complex and I don’t think either liberty or the other teams are willing to cut their own slices to accommodate new teams. Especially when the negotiations are going on. Especially if the new teams are total nobodies who on a good day can hope to finish almost on points.

    Or that due to the sheer complexity and political dagger games the whole topic about having more than 10 teams has been deleted from all of the mission agendas for 2021 to reduce the complexity and make the ongoing discussions and possible new agreements more attractive for the big teams. The less there is to talk about the easier it is for all parties to agree. Fix some of the stuff now and some later. Or never.

    In the end everybody needs names on paper to continue and while focusing on just getting the already existing 10 teams on the grid for 2021 will probably have higher chance of happening than any alternative with new teams. The other side of that is that with the existing 10 teams you are less likely to make any meaningful changes the sport needs. And I don’t think anybody is willing to lose renault and merc if all you get in their place are a panthera and an hrt. But for the new rules to go ahead ferrari and merc are the teams who need to give up the most. Bernie gave them superpowers to keep them in f1. Now someone needs to take those superpowers away and nobody is going to just give such powers away without a fight.

  3. More teams means that a change in the distribution of profits and other financial models that F1 and the teams have been working on for 2021. Seems to me that they wouldn’t want to bring new teams into the mix until all of the new rules have been agreed on and after they’ve been tested in practice in 2021.

  4. I suspect the other reason is that Liberty May be quite concerned that one or two of the current teams might elect to withdraw from F1 once the rules are finalised.

    By holding back/ keeping quiet on accepting new entrants, they may well be entertaining the idea that if a team withdraws, they might be able to broker a deal for the new entrants to purchase those that withdraw as ongoing turnkey concerns in the same way that Brawn/Mercedes did when Honda withdrew.

    I recall an article suggesting that they were keen to develop the financial arrangements so that teams acquired a “franchise” style of value and I imagine their first priority for 2021 is to ensure that there are still 10 teams/20 cars.

    The best way to do that would be to hold back new entrants until 2021 and it’s structures settle in with the option of bringing them on stream as new “franchise” owners of any teams that withdraw rather than add to the list.

  5. Thank you for explaining the situation, @dieterrencken. I really was scratching my head.

  6. Liberty would not say No to a couple of new teams, but only if they are tied to big manufacturers and not some independent small-timers. And I, as a fan, incline to agree with their view because more theams do not necesarily mean a better show. Ofcourse, everyone should be able to participate and more competition is always better for F1, but I hope these new teams are not just after the 40-50 mil that is awarded for last place.

  7. I suspect, judging from who is involved, Liberty feared the prospect of another 2009 (albeit perhaps a milder version), where new teams thought they were entering under one set of rules and actually got another, which eventually contributing to sinking three teams (not a good look for a series wanting a manufacturer to join the party)..

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