Michael Andretti is trying to buy an F1 team

[Richard C]

https://racer.com/2021/08/20/andrett...team-takeover/

Apparently Andretti is looking to get back into F1. This time as a team owner.

Richard

[Casper]

Originally Posted by Richard Casto

https://racer.com/2021/08/20/andrett...team-takeover/

Apparently Andretti is looking to get back into F1. This time as a team owner.

Richard

I hope he has verrrrry deep pockets because F1 has basically locked the gates if you haven't. $200 million is only the beginning of the spend with no prize money for the first two years and having to support the team financially for at least that time. If a new team is formed altogether I shudder to think what the bottom line would be. It is basically a closed cartel these days and the teams like it that way and buying an existing team leaves few options as well.

[Richard C]

The article calls out the $200 M buy in to create a new team and how this helped shore up the value of existing teams. It also mentions that Andretti is looking to raise $250 M via a public offering of his company.

Richard

[S griffin]

I would prefer if he was planning to start a team from scratch and join the current lot, but that's probably not likely to happen these days.

[Paradise City]

Funny to see an Andretti own Williams - from a sentimental point of view if nothing else. And Michael Andretti would certainly get redemption if he could make something of it. Easy for me to type that of course..

[veeten]

I say Haas... it's the smart move, to quote a mob boss portrayed by a famous actor.
Since 2019, this team has been in total disarray with Coronavirus outbreak and team sponsor problems, as well as basically dumping the '21 season, to the chagrin of two rookie drivers. And when one of them is the son of a famous 7-time Grand Prix champion, well it doesn't look good for the present regime of this team.

Enter Michael Andretti, not only someone with the cash to do it, but also the cache to pull it off. Not to mention the person standing beside him: Mario Andretti, with more than enough experience in Formula 1, from manufacturers to engineers. At the very least, he will consult Michael when necessary, but we all know that it will be the younger ones show.

[P38 in workshop]

I think its becoming clear that he is pretty good at running teams and wish him well.Buying in is the only realistic route and it isn't hard to see why Gene Haas might feel like walking away.I think he might do better to negotiate with the team that has Alfa-Romeo over the door as it is a more complete entity that doesn't have to buy in everything.

[Greem]

Originally Posted by P38 in workshop

I think he might do better to negotiate with the team that has Alfa-Romeo over the door as it is a more complete entity that doesn't have to buy in everything.

Notably (although not so notable in terms of results) his old man drove for Alfa-Romeo in 1981. I'm sure much could be made of the symbolism there!

[S griffin]

I think Mario would rather forget his year at Alfa, he hated that car

[chillibowl]

a bit off topic, but does the grid need a new team(s)?

one of the consequences of the budget cap was a massive reduction in number of team employees/engineers...so does F1/existing teams have a responsibility to allow for some of this now unemployed labour pool the possibility of finding employment with newly created teams?

on this level, i think F1 very much has an obligation to at least facilitate this possibility.

i get the 200m buy in to be shared among the existing teams, the prize fund is large and existing teams naturally want to protect their slice of the pie...but it seems to me that if one pays the buy in price then they have bought in and should have equal access to the prize fund from day 1.

Liberty often gets flack for wanting to apply an 'American' model to F1. expansion in NFL, NBA and NHL also have large buy in amounts (then split among the existing teams/owners), but new teams are then given draft picks and access to TV revenue from day 1 of competing...ostensibly because everyone wants expansion teams, and by extension the league, to succeed right? this is imo an American lesson worth following as buying in means buying in.

was this practice done away with in the new concord? or could the practice have change after Racing Point and Haas came to their settlement?.

[Richard C]

Originally Posted by chillibowl

a bit off topic, but does the grid need a new team(s)?

one of the consequences of the budget cap was a massive reduction in number of team employees/engineers...so does F1/existing teams have a responsibility to allow for some of this now unemployed labour pool the possibility of finding employment with newly created teams?

on this level, i think F1 very much has an obligation to at least facilitate this possibility.

i get the 200m buy in to be shared among the existing teams, the prize fund is large and existing teams naturally want to protect their slice of the pie...but it seems to me that if one pays the buy in price then they have bought in and should have equal access to the prize fund from day 1.

Liberty often gets flack for wanting to apply an 'American' model to F1. expansion in NFL, NBA and NHL also have large buy in amounts (then split among the existing teams/owners), but new teams are then given draft picks and access to TV revenue from day 1 of competing...ostensibly because everyone wants expansion teams, and by extension the league, to succeed right? this is imo an American lesson worth following as buying in means buying in.

was this practice done away with in the new concord? or could the practice have change after Racing Point and Haas came to their settlement?.

I believe the new F1 Concorde agreement brought in things like the cost caps, the $200M buy in for a new team (which I think is distributed to the other teams and not Liberty because each new team waters down the voice/revenue sharing potential/etc. of each existing team) and lastly... I think the new team is treated as an equal on day 1. So they don't have to wait until a later year to get into the revenue sharing pool.

As to the revenue sharing. I think the top 10 get a share (I assume commensurate to their WCC position), those outside of the top 10 get a lesser amount (I assume less that that given to #10 in the championship) and I think Ferrari still gets a slight bit extra on top of all of that just for being Ferrari. I don't know if there remains any other special Ferrari like agreements for legacy teams (like Williams, McLaren). I also think (not sure) that the Ferrari "veto" might be gone, but I don't know.

Richard

[steve_r]

I would love to see new teams. To get anywhere near competitive they either need to poach a load of staff from existing teams and sink in a massive amount of money, or do what Haas have done and linked up with an existing team and throw in a massive amount of money.

Mercedes and Ferrari already have strong links with other teams, and Red Bull have their own junior team. Alpine seem the obvious one for a new team to tie up with?

[S griffin]

The days of buying a Cosworth DFV and going racing are long gone it seems. You need a link up with a major manufacturer to compete in F1 now

[Casper]

I suspect that F1 has gone beyond the place that a new team could enter and develop a car. They would have to first acquire the talent to do so and accept they are going to never be more than also rans. It is inconceivable that a new team would be anywhere near even the middle of the field these days.

[Richard C]

Originally Posted by steve_r

I would love to see new teams.

Not quoting your entire post for brevity, but I see entry into F1 following three paths

1. Totally new, but try to build from ground up (or maybe extend from a lower series) such as Manor/Virgin/Marussia, HRT, USF1. Those all failed
2. Totally new, but subcontract out the work (including partnering with a manufacture). This was the Haas path. The jury is still out. (And I think Gene Haas has said he wishes he has bought an existing team in hindsight)
3. Buy an existing team and rebrand/rename. This seems to be the option that works.

I think #3 works for number of reasons. You effectively are buying something that works on at least some level. History has shown that building a team from scratch is VERY hard. I think existing teams who might consider selling all (or part ownership) of the team know at this point that there is inherent value in what they have beyond the $200 M boost in value that was recently given to each team. It is the situations when a team is financially destressed (such as Williams and to a degree McLaren) where someone can swoop in and score a deal. But both Williams and McLaren seem much stronger at this point (Williams selling it all and McLaren selling some of itself I think).

Based upon the article, it seems like Haas was a "no go" at this point in time. That to me suggests that either Haas is in a wait and see regarding how things shake out in 2022 seasons (regulations, cost caps, etc. all play more in their favor)... or they already have a potential buyer agreement... or both. I can imagine that Haas might have an escape plan with a potential buyer (Mazepin) in which if 2022 is a trainwreck for Haas, that they pull the trigger to sell the team. But if 2022 works well enough, they don't sell the team and continue onward.

I don't follow the particular situation much with teams like Aston Martin (Racing Point/Force India/etc.) or Alfa Romeo (Sauber) to know the likelihood of them being part of a potential deal with Andretti.

Richard

[S griffin]

The problem with the teams that entered in 2010 was that they entered under what was a budget cap that was quickly discarded

[Richard C]

Originally Posted by S griffin

The problem with the teams that entered in 2010 was that they entered under what was a budget cap that was quickly discarded

That was a missed opportunity for sure.

Richard

[chillibowl]

is Haas considered a new team from scratch?

facilities in N.Carolina are shared with their Nascar entries and the UK base is former Marussia/Manor/Virgin. off the top of my head i cant recall who owned it before.

also interesting is that Virgin was that team that came in and said they were going to build their car exclusively via CFD or something to that effect. thats didnt work out.

at the time they were saying how this would massively reduce costs, but a decade on and i suspect the price of supercomputers and simulation technology plus staff has gotten more expensive and even more expensive to correlate into real life?

i would say that these days, unless you have an existing deal with your local municipality, fat chance in getting new access to the water and power needed to run your computers and wind tunnels.

starting a team today from scratch in the UK, let alone away from the F1 base, could be more prohibitive now day then it was before the budget cap era?

[E.B]

Originally Posted by chillibowl

facilities in N.Carolina are shared with their Nascar entries and the UK base is former Marussia/Manor/Virgin. off the top of my head i cant recall who owned it before.

also interesting is that Virgin was that team that came in and said they were going to build their car exclusively via CFD or something to that effect. thats didnt work out.

at the time they were saying how this would massively reduce costs, but a decade on and i suspect the price of supercomputers and simulation technology plus staff has gotten more expensive and even more expensive to correlate into real life?

ISTR that was a Nick Wirth theory to use CFD only when his company tied up with the Marussia Manor Virgin set up. WRT (Wirth's company) did the design work for them. The CFD only theory was based I believe on his success with that concept in other categories (ALMS?). He might have been successful in other perhaps less aero sensitive categories but certainly the theory never worked in F1 terms.
Wirth of course was shown the door at Virgin.
I believe also that the CFD only route was a theory based on not having anything like a proper F1 budget. A figure I recall reading was I think c 40 million per season target total spend for Virgin was the target and without the cost of WT programmes they thought (on the basis of previous non WT success) they could make it in F1 on the cheap.
Clearly F1 is a bit too aero sensitive to support that theory. I guess the words cheap and F1 dont get used much in the same sentence for a reason.

[Richard C]

Originally Posted by chillibowl

is Haas considered a new team from scratch?

No? Maybe I poorly communicated my prior post. Haas WAS started from scratch. They were a new entrant when they joined F1. They didn't buy an existing F1 team (as well as didn't buy an existing F1 entry).

They do cohabitate in the US with their NASCAR team (I think actually they did build a new building for that). They did hire new staff vs inherit an existing staff. The are different than the other "from scratch" teams in that they looked to externally source (Dallara; Ferrari; 3rd party win tunnel; etc.) as much as possible vs. building it all themselves.

Richard

[S griffin]

Haas did start their F1 team from scratch, but they did have help from Dallara helping provide the chassis and Ferrari providing the engines. Plus they already had a team in NASCAR that they had the budget to diversify into F1

[peebee2]

People thinking they might buy Haas seem to be assuming Mazepin hasn’t already bought it / signed to buy it.

[Casper]

HAAS IIRC was deal done between Ferrari and HAAS which re-equipped Ferrari with up to date production machines and HAAS got a leg up into F1. I might be wrong but that is the way I recall it.

[S griffin]

I know Haas were originally going to enter in 2015, then decided they wouldn't be ready, so delayed it to 2016

[Moneyseeker]

Originally Posted by Richard Casto

Not quoting your entire post for brevity, but I see entry into F1 following three paths

1. Totally new, but try to build from ground up (or maybe extend from a lower series) such as Manor/Virgin/Marussia, HRT, USF1. Those all failed
2. Totally new, but subcontract out the work (including partnering with a manufacture). This was the Haas path. The jury is still out. (And I think Gene Haas has said he wishes he has bought an existing team in hindsight)
3. Buy an existing team and rebrand/rename. This seems to be the option that works.

I think #3 works for number of reasons. You effectively are buying something that works on at least some level. History has shown that building a team from scratch is VERY hard. I think existing teams who might consider selling all (or part ownership) of the team know at this point that there is inherent value in what they have beyond the $200 M boost in value that was recently given to each team. It is the situations when a team is financially destressed (such as Williams and to a degree McLaren) where someone can swoop in and score a deal. But both Williams and McLaren seem much stronger at this point (Williams selling it all and McLaren selling some of itself I think).


Based upon the article, it seems like Haas was a "no go" at this point in time. That to me suggests that either Haas is in a wait and see regarding how things shake out in 2022 seasons (regulations, cost caps, etc. all play more in their favor)... or they already have a potential buyer agreement... or both. I can imagine that Haas might have an escape plan with a potential buyer (Mazepin) in which if 2022 is a trainwreck for Haas, that they pull the trigger to sell the team. But if 2022 works well enough, they don't sell the team and continue onward.

I don't follow the particular situation much with teams like Aston Martin (Racing Point/Force India/etc.) or Alfa Romeo (Sauber) to know the likelihood of them being part of a potential deal with Andretti.

Richard

But by buying Haas, aren't you effectively buying an 'operator' than a 'constructor', what resources does Haas currently have to design and largely build an F1 car themselves. It would (should) be a cheaper purchase price due to that reason and as you day the jury is out on if this type of semi B team actually works for the second team overall.