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How the FIA went from seven F1 new team bids to Andretti

The FIA's announcement this week that it has put forward Andretti Formula Racing to join the Formula 1 grid marked the end of a gruelling eight-month process.

Michael Andretti, Andretti Autosport

And while there remain some big challenges ahead, because Andretti still needs to agree a commercial deal with FOM to be allowed to race, it is the closest F1 has had to a new team entrant for a while.

As Autosport's sister site Motorsport-Total.com revealed over the Japanese Grand Prix weekend, Andretti was the last team standing after just four candidates had made it through to the second stage of the FIA's process of evaluating interested parties.

Three bids - Hitech, LKYSUNZ and Rodin Carlin – were then duly informed that they had not been good enough to be taken any further forward.

However, the process that was kicked off in early February by the FIA to invite expressions of interest from candidates actually drew responses from seven teams.

In addition to the four who made the second stage, it is understood that there were three other parties – one from Hong Kong businessman Calvin Lo, former BAR co-owner Craig Pollock's Formula Equal idea, plus the South Korean project Panthera.

For this first round of proceedings, the seven projects had to submit what was termed a "preliminary expression of interest."

This required an application fee in the amount of 20,000 US dollars, which all seven paid.

In this first round, applicants had to submit, among other things, "the identity of all shareholders and the ultimate beneficial owner of all shares" and "curriculum vitae for each director and officer of the candidate entity".

The FIA reviewed the documents submitted and sent all seven applicants a formal response requesting further information in the form of a detailed questionnaire.

Those who wanted to remain in the process had to transfer another $280,000 at that point. This is when Calvin Lo, Craig Pollock and Panthera bowed out of the process.

Craig Pollock, PURE Engines on the grid

Craig Pollock, PURE Engines on the grid

Photo by: Sutton Images

That left four serious contenders who were willing to pay the full $300,000 to the FIA.

At the FIA, this is when its efforts to analyse the projects in detail had to ramp up because it required deep analysis of extensive documents.

It was not a case of skimming the documents and FIA president Mohammed Ben Sulayem picking the ones he liked the most.

Instead, the applications had to be closely examined on the basis of the criteria defined in the application procedure and the content of the applications had to be checked for plausibility and truthfulness.

In deciding that Hitech, Carlin Rodin and LKYSUNZ's applications were not being taken forward, the FIA duly notified the three parties of the reasons why, although these have not been publicly disclosed.

But what is certain is that the FIA did not take the rejections lightly. If even one of the reasons for a rejection was not watertight, the rejected applicant could have had grounds in theory to take the governing body to court and go legal to secure its place on the grid.

Sources suggest Hitech was the closest to joining Andretti in going forward to the final stage. The British team has a successful record in single-seaters and a reasonable financing plan.

However, Vladimir Kim, a Kazakh billionaire, was behind the financing and there may have been some uncertainties about long-term funding that played a factor here in the end. But that is only speculation as there has been no word from the FIA nor the team itself.

Other candidates also showed strongly in different areas. LKYSUNZ is believed to have been very convincing on the element of diversity.

Its plans to have employees from a wide spectrum, plus its ecological sustainability, were among the most important evaluation criteria in an FIA admission procedure that included them as elements for the first time.

However, what LKYSUNZ CEO Benjamin Durand could not sell convincingly was his concept of being able to participate competitively in F1 in sporting terms.

Durand wanted to look for a technical partner who would not only supply the power units but also other components, comparable to the partnership between Haas and Ferrari.

Start action

Start action

Photo by: Alfa Romeo

In the long term, a headquarters was to be set up near Kuala Lumpur, with Asian and African engineers for whom there is no career path into Formula 1 today.

LKYSUNZ also unveiled a new investor from Florida, the Florida-based sports investment group Legends Advocates, which gave Durand a commitment to provide up to $1 billion in capital should the project be awarded a spot on the grid.

The project also made an exciting push when, via press release, it offered to voluntarily pay $600 million in anti-dilution fees to the existing teams instead of the current $200m.

This was a move that the existing teams probably welcomed, but which did not go down well at all with the FIA. The Sulayem administration is said to have been offended by the impression that it was possibly giving away the slots to the highest bidder.

LKYSUNZ apologised for the impression in another press release, but by then it was too late. The FIA had rejected the application long before the LKYSUNZ press release and there was no scope for it to be re-evaluated.

Rodin Carlin was the project that had the biggest task in convincing the FIA over its realistic hopes of competing strongly in F1. Rodin is a race car builder from New Zealand, and the team planned to have its factory there.

This is an enormous logistical and financial challenge, if only because of the flight connections, which would have been almost impossible to overcome.

Meanwhile, as it has subsequently confirmed, Rodin Carlin committed to putting a woman in one of its two cockpits as part of its diversity concept. Three-time W Series champion Jamie Chadwick had even completed a test in a Rodin single-seater and was mentioned as its preferred candidate to get a shot at F1.

Zane Maloney, Carlin

Zane Maloney, Carlin

Photo by: Red Bull Content Pool

In the end, Andretti was the only team left standing – and it stood out in all aspects.

While some applicants could not present a technical agreement with a partner team, Andretti had the official commitment of a new manufacturer: Cadillac and General Motors (GM) respectively.

However, it is interesting that in the FIA's press release on the award for Andretti, GM is not mentioned once. The reasons for this are not clear, but one factor may be the company's current wage negotiations with the UAW (United Auto Workers) union.

The UAW is currently negotiating wage increases for the next four years with the GM, Ford and Stellantis car companies. The union had demanded more than 40 per cent, but GM is currently offering 20 per cent as a compromise. This is an emergency offer, as the UAW had already threatened to strike.

Against this background, it would probably not go down well in the public perception if GM announced its entry into the billion-dollar business of Formula 1 with a big drum roll.

However, while GM was absent from the FIA statement, the company's logos were still a key part of Andretti's own official press release responding to its application being successful.

But despite the FIA giving Andretti the green light to compete, it is far from certain that the squad will make it as far as the F1 grid.

For now, the more difficult part of the process lies ahead, because before Andretti can actually take part in grands prix, an agreement with F1's commercial rights holders FOM is essential.

Media reports that Andretti could theoretically compete without such a deal in place, receiving no prize money in the process, are wide of the mark. It has been an explicit demand in the Concorde Agreement that oversees the running of the sport that all teams must have a commercial deal in place with FOM.

The important thing is that FOM, and its owners Liberty Media, are conducting the talks with Andretti all by themselves and must ultimately decide on the bid unilaterally.

The 10 existing teams may well have an opinion on a potential entry, and that opinion will certainly be heard, but the teams have no formal say in the final call.

The subject of the discussions between the teams and Liberty will certainly be around the well-discussed "anti-dilution fee" that is aimed at offsetting losses in prize money for any new addition on the grid.

Michael Andretti, Team owner Andretti Autosport, Zak Brown, CEO McLaren Motorsport

Michael Andretti, Team owner Andretti Autosport, Zak Brown, CEO McLaren Motorsport

Photo by: Andreas Beil

With the pot of commercial income having to potentially be shared 11 ways rather than 10, it is clear that every competitor on the grid has a financial interest in what is happening.

An anti-dilution fee of 200 million dollars has been enshrined since 2021, but that is now widely believed to have been pitched far too low considering the expansion of F1 income over the past few years. A figure around 600-700 million has been suggested as more in line with where things are at right now.

But there are other opinions in the paddock about this being more than just a simple matter of how big the anti-dilution fee is.

There could be a potential violation of the EU competition authority's antitrust rules over that fee. And, at least in purely theoretical terms, Andretti could take legal action to avoid having to pay an "anti-dilution fee" at all.

The fact is that an agreement with FOM is not a foregone conclusion. And neither is an entry in 2025, as in theory, the FIA has approved.

Firstly, there is hardly any time left until 2025, even if a deal with FOM is concluded in the next few days. Existing teams, with their infrastructures already in place, are already hard at work on their 2025 projects – so Andretti would be so far behind.

There is another element at play here too. With 2025 being the last year of the current Concorde and rule period, it means a new Concorde Agreement has to be negotiated for 2026 when new rules are coming in too.

It makes little sense for Andretti to throw everything at one season and then everything gets ripped up and started again for the following year.

What is a far more likely outcome is Andretti targeting 2026. But then much will depend on how FOM and the team define the clauses in the new Concorde Agreement that deal with new teams from that season, and that's something entirely within their hands.

Additional reporting by Jonathan Noble

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