Michael Schumacher, Jordan, Spa-Francorchamps, 1991

$200 million fee for new F1 teams is “absolutely fundamentally wrong” – Jordan

2021 F1 season

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F1’s new $200 million “anti-dilution” fee would have prevented teams like Jordan from entering the sport, its founder Eddie Jordan has said.

Under the new Concorde Agreement which has come into force for the 2021 F1 season, new entrants to the championship must pay a fee of $200 million (£145m) which is divided between their existing competitors.

Jordan told RaceFans the new anti-dilution fund would have prevented him from being able to enter F1 with his eponymous team 30 years ago.

“I think it’s absolutely fundamentally wrong,” said the 72-year-old, who sold his team to Midland Group in 2005. The Silverstone-based squad will compete as Aston Martin this year.

Over the course of his team’s 15 years in F1, Jordan gave the likes of Michael Schumacher, Rubens Barrichello and Eddie Irvine their grand prix debuts. Jordan believes the anti-dilution fee “makes a cartel out of the teams that are there” and will discourage new entrants from joining the championship.

“I can see that it creates a value on the existing teams, as people will buy a team rather than enter a new one,” he said. “But I’m not in favour of it, because it makes the sport a bit like a franchise and it would have curtailed teams like Jordan entering Formula 1.

Analysis: No new teams before 2026? The likely cost of F1’s $200m “anti-dilution fund”
“Jordan came through Formula 4, Formula 3 and 3000 and won all the races in those categories to be able to get the superlicence to move forward. This stops all of that, so I’m wholly against it.”

Jordan has recently invested in the sport hospitality and travel management app Guestia, which was tested by the McLaren F1 team last year. He warned that Formula 1’s record-breaking 23-round championship for 2021 will put excessive strain on team’s personnel.

“If they keep 23 races, I think in terms of the crew and the welfare of the staff and everything that 23 is too many. With that many races you need to have a rotation of the staff and I’m not a big fan of that.”

Following F1’s disrupted 2020 championship, Jordan suspects not all 23 races will go ahead this year. “However I don’t believe that we will lose as many races this year as some people may think,” he said, “and we can still get to around the 20 mark this year.”

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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  • 51 comments on “$200 million fee for new F1 teams is “absolutely fundamentally wrong” – Jordan”

    1. Hard to disagree with Eddie’s comments here. The anti-dilution fund is one of the more obvious symptoms of a major problem with F1 – that the teams have too much say over the sport and the way it is run.

      Any sensible promoter would be looking to improve the long-term sustainability of the sport by increasing the number of entrants. There are probably three teams whose future is uncertain – Williams, Haas and Sauber (once they lose Alfa’s backing, which is likely to happen after this season) – and even losing one of those three would be a critical blow to the sport. Actively discouraging new participants in the current climate is just senseless.

      1. Biskit Boy (@sean-p-newmanlive-co-uk)
        24th March 2021, 7:52

        Agree 100%

        Sure the 107% is enough regards anti-dilution.

        1. Biskit Boy (@sean-p-newmanlive-co-uk)
          24th March 2021, 7:52

          107% rule

      2. @red-andy Liberty wanted the anti-dilution fund, because it didn’t want to pay more money to extend the prize fund down the order (as necessary to maintain more than 10 teams). The teams supported it because they didn’t want to win less money, of course, but removing the teams from power would be unlikely to affect the anti-dilution fund due to teams and administration alike wanting to create de facto franchises.

      3. Yes. The top teams are so valuable that the sport allows them to dictate who wins. F1 is becoming Le Mans. It is all about the teams.

        1. Sadly, this is the truth. They also get to make the rules, don’t forget.

          I’m looking forward to seeing how F1 handles the next manufacturer pulling out.
          With fewer than 20 cars and only 1 or 2 engines, F1 literally becomes the history that it is so concerned about preserving.

      4. Jordan is not wrong in principle, but this is not the same F1 that he entered in 1990.
        F1 today doesn’t want the likes of Jordan.
        In fact the whole junior setup is no longer geared for a team to graduate to F1, only drivers.
        The leap from F2 running a spec car to F1 is to massive for most teams, even without the £200M.

        1. That in itself is a huge problem with the sport. It’s not inconceivable that there will be another exodus of manufacturers so the fact there is no route into the sport for decent privateers is an existential threat to the sport.

          1. Basically, would we rather have cheap and cheerful f1, or no f1 at all?

      5. Pitstop Madness
        24th March 2021, 17:55

        This is all about promoting constructors that build Hybrids and Electric Cars.The FIA don’t want dirty combustion engine manufacturers in their propaganda sport. Thus they make it unaffordable for garage workshop teams to compete.

        I love F1 but the FIA are working towards an agenda and that is to phase out the internal combustion engine for good.

        Porsche on the other hand have a different agenda. They are promoting Efuel which is only 5% emmisions of regular fuel. Which in the grand scheme of things is probably far more eco friendly than Electric power.

        Reply moderated
    2. Why not reduce or remove the F1 team entry fee but require new teams to have amassed a certain amount of Superlicense points in the lower racing classes, just like new drivers need to do?

      1. And I think the idea is good, like jordan said happened for his team back then.

        1. Teams need to show they can perform before they can enter F1; the system is already in place, it just needs to be applied to the teams too.
          Another bonus: Teams will have an incentive to hire highly skilled drivers over rich, but less talented drivers as the latter won’t bring as many Superlicense points to the team. There will always be pay drivers, the money needs to come from somewhere anyway, but there will be more chances for talent.

      2. Because their worry is about money, not competence. In the eyes of a paddock which regards income as a zero-sum game, even a competent team takes money off some combination of the other teams and the Liberty.

    3. I’m still struggling to fathom why the $200 million gets shared out with the other teams. That to me just seems crazy.

      Why wouldn’t Liberty just hold the 200 million against future failures and then allow its release back to the team in small parcels from a specified point like the beginning of season 3.

      Nothing about this makes any real sense, but then I guess it’s F1 and doesn’t have to.

      1. It’s a closed system, american style. No promotion or relegation, just a set of franchises. It’s hard to see this as anything but that, sadly.

      2. I’m against this rule, but they demand that fee because there’s a limited prize fund to be shared among the teams and more teams means smaller share. This is a purely selfish reason of course, since more teams means less money (at least short term, I believe that having more teams increase the value of F1 as a whole). There is another reason. Owners like Haas expect to sell their teams for more money, since it’s better overpaying a little bit for an existing team (like 50 mil or so) than gifting the competitors with 200 mil.

      3. Isn’t that fee there because a new team would dilute out the prize money for existing teams. The anti-dilution fee doesn’t sit easy but in effect it’s to stop a new team suddenly causing a drop in revenue for teams already on the grid.

        1. Exactly, that’s why it’s called the “anti-dilution” fee.

          With the new more equitable spread of prize money, which generally would be viewed only as a good thing, the one downside is that adding any extra teams means that the other teams will get less prize money at the end of the year. Liberty are not going to start paying extra prize money out of their own (shareholders) pockets.

          If the anti-dilution fee didn’t exist then the current teams would probably not be very welcoming to any new teams.

          In the bad old days of prize money distribution this wasn’t a problem, because team 11 and beyond wouldn’t win any prize money anyway so no dilution for the existing teams.

          It’s a difficult balance to strike and I don’t think Liberty have got it right, 200M seems a bit steep, especially considering the budget cap level. A better balance could be found.

          1. @gdog thank you, agree with you

      4. @dbradock Because the objective is to make sure that, to the extent possible, the risk of either the teams or Liberty losing income is reduced. Any system where the new team sees a penny of the anti-dilution money back through a direct mechanism would constitute a failure of the anti-dilution fund to do its job.

        Granting the money to the teams means the prize fund calculator doesn’t have to be changed, unlike a system where Liberty simply kept the money itself. Either refunding teams for losses to the prize fund or having Liberty extend the prize scale downwards and “refunding” Liberty for this would work for the purposes apparently intended – Liberty refunding teams is a matter of style, not substance.

        (And yes, the teams and Liberty alike appear to be deliberately *trying* to make a franchise system).

    4. It seems the imposing of the $200mil entry fee shows that FIA/Liberty are keen to maintain the status quo. Which does make a mockery of speculation of additional teams being in talks to enter F1.

      1. I thought FIA or maybe Liberty had already intimated they’d drop the fee for an approved team (Porsche I guess).
        It’s termed anti-dilution so if they lose a team, there’s no dilution with replacement.
        The teams themselves had a casting vote so, while I agree it doesn’t make sense from the outside, they must be happy with it. I speculated at introduction that team finance managers might be happy with a valuation figure they could take to the bank.

        1. Id’ suggest they’d be a lot less happy with it when (not if) F1’s total value (and income) drops.

    5. I don’t really see a problem with the “rotation of staff” to accommodate for more races and less strain on crew members. Why not do this? I get the team management argument that only having to “hyper-“specialise one set of staff is more cost effective and perhaps yields better results for things like fast pitstops and last-minute car repairs. But ultimately, for most tasks I’d expect having a less overworked and stressed team of engineers in the garage yields better results and more productivity overall.

      Plus I’d imagine for the people that are currently stuck in the factory, it’d be nice to go to half the races and become even more invested with the drivers and management that normally doesn’t really get to interact with them that much in the factory setting.

      1. @aiii It’s considerably more expensive, plus there’s a loss of continuity (which has performance implications) – which is why teams have for the past few years accepted a much higher burn-out rate for the sake of holding onto one “A” team plus a substitute roster.

        1. They don’t need to roster 50/50 for an increase from 20 – 23 races. 15%-20% of the crew should be off at any one race assuming all would like to assume pay/kudos/position-risk etc. for time off. It’s sure to lead to race problems, slow pitstops & reliability, but that happened last year with 17 and, let’s face it, that usually makes it more entertaining.

      2. Firstly, the teams have indicated that it’s very difficult to rotate some roles between staff, so there is a limit to what staff rotation can do. There are some activities at the track that require specialist staff (and the same applies at the factory), and equally not everyone back at the factory may either want to go to a race or have the right skills for a track side role.

        Secondly, it rather goes against the idea of cutting costs if teams are then being encouraged to recruit more staff to enable them to rotate some of them around.

        Reply moderated
    6. Why do they insist of that fee?Why not make it lower at like 50-100 million?The new regulations would have been a good chance for a new entry.Now they have to pay 200million plus the hundrends of millions that require to make a team. What if teams like Sauber or Haas leave?F1 would stay with only just 16 cars?

      1. Don’t think so, and honestly it’d serve them right if f1 ended after sauber and haas left due to rules like these. 50 mil would be better, but even so if you think about it, it’s way too much: look at honda and the amount they spent with nothing to show for it unless they manage a title this year just before leaving, it’s already hard enough to make a competitive car when joining f1, let alone having to lose even just 50 mil on top.

      2. @panosx13x Because $200 million is the amount Liberty and the teams think it would (approximately) cost them to pay for a successful team to be on the grid for five years, assuming they average 10th.

    7. They should revert it to a 200m bonus instead of a fee, anyone who is prepared to plow the needed money into F1 deserves a bonus. At least if they are in it for more than a season. More teams do not dillute the racing, they increase the value of the championship. Using the word dilluting means that the championship would be worth the most if only Mercedes drove around the track by themself and won all medals alone (ok we are almost there anyway)

      1. @maisch Not really – the current prize structure is designed around 10 teams, so 10 is the optimal number. (It’s why the fee is waived when there are fewer than 10 teams on the grid). Also, it’s not the racing the teams and Liberty fear diluting – it’s their income (more teams earning prizes mean that either the prizes must be smaller – reducing individual team income – or Liberty’s profit must be smaller).

    8. Why not reduce the fee but oblige the entrants to present a 5-year viability plan, which is not based solely on points? I feel there is a way to keep the sport open and also avoid those who have no idea what they are doing and only want to cash in, cash out as quickly as possible..

      1. @fw11b They claimed they looked into the viability & sustainability in 2010 when they accepted Lotus, HRT, Marussia & USF1.

        One of those teams didn’t manage to build a car, One ran out of money before starting the season & the other 2 spent there time in F1 miles off the pace & struggling to stay afloat.

        1. Those teams (at least three of them) agreed to enter when the plan was for a budget cap, which then went out the window. They were victims of stupid decision making at the top – not their own poor planning.

          Reply moderated
          1. My apologies Roger Ayles. I misunderstood your point. We’re on the same page I think!

            Reply moderated
    9. Stephen Higgins
      24th March 2021, 11:28

      I understand why F1 doesn’t want any more Andrea Modas, EuroBruns, Lifes, etc on the grid, but a few more Jordans, Stewarts, Tyrrells, Williams’s and the like wouldn’t hurt.

      Even another Simtek wouldn’t be such a bad thing.

      If anything, more independents might provide a gateway for more manufacturers to come back into F1.

      Being so exclusionary can only hurt the sport in the long run.

    10. Tommy Scragend
      24th March 2021, 11:35

      It’s not often I think what comes out of Eddie Jordan’s mouth is sensible, but he has it spot on in this case.

      A cartel is exactly what the current situation is in F1. Stuff the quality of the racing, stuff the quality of the field, stuff the “show”, just show me the money.

      Liberty/Bernie – I’m not sure there’s much to draw between the two. At least Bernie had a background in F1.

    11. Pretty simple solution – they should work out how many cars max they ever want on the grid, and divide the prize money including any ‘missing’ teams. That way no existing team ‘loses out’ when a new one comes in.

      What they do with the money in the mean time could be things like charity, grass-roots investment, etc. I’m sure they could figure something out.

      I do think new teams should have to prove they are ‘ready’ for the challenge of entering F1 but a fee like that is crazy.

      Not sure about some of the other points EJ mentions though.

    12. because it makes the sport a bit like a franchise

      I hear that this is the goal & was also one of the first couple of thing that Liberty brought up with teams when they took over F1 in 2017.

      Teams were/are largely in favour of it as it makes them more valuable.

    13. It basically makes every team worth at least $200 million.
      It also makes threats from teams leaving F1 pointless, because they will sell team, not shut in down.

      1. The ruling is fundamebtally wrong but it does work in the way it was conceived.

        1. Yes !
          Turns an unforeseeable invest (sport) into a capital asset.
          Add pay-TV
          Minus open tech-regs & individual designs
          => all safe & sound
          (not interesting anymore, but Hey !? who cares, in finance industry … )

    14. They should just remove the restrictions & go back to allowing any team that is able to produce 2 cars to enter which meet the regulations.

      Everyone always brings up Andrea Moda as a reason why you can’t have a more open entry, But that is a very extreme & specific case which wasn’t the widespread thing. And many of the more concerning aspects of that situation (Drivers been sent out with no seat, Intentionally sabotaging one driver’s car etc..) couldn’t even happen today given the better regulations in terms of scrutineering & safety.

      Yes you had many ‘no hopers’, But they were serious teams who were trying to compete just as HRT, Manor & Lotus/Caterham were when they entered. And many of those ‘no hopers’ gave drivers, mechanics, engineer’s, sponsors & more a foot in the F1 door with some going on to bigger teams & greater things or at least finding a longer career a bit further up the grid.

      1. once too many big organisations joined in,
        an open / unforeseeable / stunt-like show-biz is not wanted anymore

    15. they want 40 races per season with 4 teams running one chassis. great endgame guys.

    16. It’s normal to pay when you enter a franchise (not the same but very close).
      And $200m is peanuts IF F1 were paying a fair share to all ‘franchisees’/teams (which I hope they will soon).

    17. Turns an unforeseeable invest (sport) into a capital asset.
      Add pay-TV
      Minus open tech-regs & individual designs
      => all safe & sound
      (not interesting anymore, but Hey !? who cares, in finance industry … )

    18. LeRoyKinCaid.
      26th March 2021, 13:32

      There are not enough teams in F1 already and this ridiculous ruling is going to make sure there never is, some of the best racing and development has come from the smaller less financially viable teams in the past and ensuring that no more teams like that will only make this ‘sport’ become even more boring than it already has become.

      Reply moderated

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