Michael Andretti, the Chairman and CEO of Andretti Global, was featured in the tabloid format on 03.05.2024. The occasion was the Formula 1 World Championship, specifically the Miami Grand Prix held in Miami, Florida, USA, during the Sprint Qualifying Day.
The Chairman of the United States House Judiciary Committee recently composed a letter addressed to Liberty Media. The purpose of the letter was to request documents pertaining to Andretti’s potential entry into Formula 1. Despite receiving approval from the FIA, the American team failed to obtain the necessary authorization from Formula One Management (FOM) in October of last year.
In a letter written by 12 members of the US Congress to Liberty President Greg Maffei, concerns were expressed regarding potential violations of antitrust laws. The letter was sent just last week. NBC, an American television station, has now obtained a letter from Republican Jim Jordan. In his letter, Jordan seeks answers from both Maffei and F1 CEO Stefano Domenicali.
According to Jordan, the Committee on the Judiciary is responsible for evaluating the effectiveness of federal competition laws in safeguarding against monopolies and other unfair trade practices. He highlights that sports leagues, including Formula 1, operate within a specific area of antitrust law where a certain level of cooperation is necessary for the creation of the product. However, if a sports league deviates from its established rules and practices in a manner that hinders competition and diminishes consumer interest, such collusion may be deemed anti-competitive behavior.
Jordan expressed his dissatisfaction with the reasons given for rejecting Andretti’s entry into Formula 1, arguing that several teams on the grid are not capable of competing for victories.
The justifications presented for denying Andretti Cadillac’s participation in Formula 1 seem to be pretextual, arbitrary, and unrelated to Andretti Cadillac’s suitability for competition.
For instance, Formula 1 claimed that a new team could only bring value to the sport by striving for podium finishes and race wins.
However, the FIA had already assessed and approved Andretti Cadillac’s technical capabilities to compete against current teams, and most of these teams do not meet Formula 1’s standard of consistently contending for podium finishes and race wins.
Formula 1 also criticized Andretti Cadillac for attempting to use an existing engine manufacturer, as it could potentially damage the prestige and reputation of the sport. However, Formula 1 simultaneously stated that if Andretti Cadillac used a new engine manufactured by General Motors in their debut year, it would pose a challenge for the team.
Formula 1 cannot have it both ways. As FIA President Muhamed Ben Sulayem explained, the rejection of Andretti Cadillac ultimately boils down to financial considerations.
Jordan concurred with Congress’ perspective that the argument against an 11th team potentially harming the existing teams implies that Formula 1 is engaging in anti-competitive practices.
Weak teams seek protection from competition at the expense of consumers, and the addition of a new team would compete for prize money and sponsorships, benefiting the sport as a whole.
If Formula 1 must impede competition and harm consumers in order to shield struggling competitors, then the entire Formula 1 model may be flawed, and the organization cannot hide behind the guise of being a sports league while engaging in anti-competitive behavior.
As a follow-up to the Congress letter, Jordan has requested information and documents from Formula 1 to review the decision-making process regarding Andretti’s entry.
Additionally, Jordan has also asked to receive the communication records between Formula 1 and the current 10 teams regarding potential new entries into the sport.
Alongside inquiries about the anti-dilution fees within the Concorde Agreement, Jordan has requested a response from Formula 1 by 21 May, with a deadline of three weeks.