WASHINGTON — When the Andretti racing team recently contacted a U.S. congressman to discuss Formula 1’s shocking decision to reject its grid bid, it sparked interest.
A legendary American team racing at the pinnacle of motorsport, with an engine built by an American automaker? It could provide fuel for the GM and Cadillac brands, a boon for the national economy and a chance for American glory in this popular global sport.
Then things escalated quickly.
Congressman Rep. John James, R-Mich., joined with a dozen lawmakers from both parties to write a letter to Formula 1 Group’s U.S. owner, Liberty Media, demanding answers about why he rejected Andretti. In scathing remarks to reporters outside the Capitol On May 1, James accused F1 of “cartel-like behavior” and anti-competitive actions aimed at protecting the largely European teams from American competition.
“Mr. Andretti’s people have contacted our office to schedule a meeting to discuss excluding a car built by Andretti Motors GM from F1,” James spokesman Noah Sadlier said. “GM is important in our district, so this was obviously of interest to Rep. James.”
Within days, House Judiciary Chairman Jim Jordan, the Ohio Republican speaker and a viewer of the Netflix series “Drive To Survive,” launched an investigation. Committee staff have since met with representatives of Liberty Media, a source familiar with the investigation said. The Jordanian office declined to comment on the investigation.
Earlier this week, Sen. Amy Klobuchar, D-Minn., who chairs the antitrust panel, led a half-dozen senators in calling on the Biden administration to investigate F1 for violating U.S. antitrust law. The Justice Department and the Federal Trade Commission confirmed receiving the letter.
“I think there’s a strong case to be made, otherwise we wouldn’t have sent this letter,” Klobuchar told NBC News. “American teams driving American cars should have equal opportunities to compete. And I’m very concerned that there was collusion to avoid competition from Andretti on the racetrack and competition from Cadillac in car sales. »
Standing next to the Members of Congress at the May 1 news conference included racing legend Mario Andretti, the 1978 F1 world champion and patriarch of the Andretti racing dynasty, who said he was invited by lawmakers to join them .
Andretti’s visit to Washington, which included meetings with several lawmakers, raised eyebrows in the Formula One world. It involved a dispute between a sports league and an aspiring competitor. Why did the United States government get involved in the threatening demands of F1 management and owners?
A few days later, at a VIP reception during the Miami Grand Prix weekend, Andretti and Greg Maffei, CEO of Liberty Media, crossed paths.
It didn’t go well.
As Andretti recalled to NBC News, Maffei walked into a conversation he was having and told him: “Mario, I want to tell you that I will do everything in my power to ensure that Michael never comes into contact with me. Formula 1”, a reference to his son. Michael Andretti, who is leading the team’s bid. The elder Andretti was stunned.
A source close to Liberty Media disputed this version of events, saying it was Andretti who approached Maffei and that Maffei told him that F1 had rejected Andretti Global’s application for good commercial reasons.
This interaction could have legal consequences.
“Andretti’s anecdote, if true, raises a crucial question: Why did Maffei oppose Andretti’s offer? said Daniel Francis, a law professor at New York University and former deputy director of the FTC’s Bureau of Competition. “If he was opposed because he thought Andretti would be bad for the sport, or because he didn’t believe Andretti would be competitive, that’s OK. Antitrust laws don’t say you have to be nice to people at parties. But if the opposition is motivated by personal reasons or by the desire to maintain monopoly profits at the expense of consumers, this constitutes a weapon for Andretti’s claims.
More broadly, Francis said: “Antitrust cases live or die on the basis of evidence about effects: in particular, effects on consumers. There are really only two questions here: are the membership rules in the interests of consumers? And were they applied fairly? If that is the case, (F1 management) has nothing to fear. Otherwise, Andretti might have a case here.
The underlying source of the tension is that the sport’s governing body, the FIA, accepted Andretti Global’s application to become F1’s 11th team, saying last October that it met “the strict criteria” set out “in all important respects”. But a few months later, in January, F1’s commercial management rejected it, concluding that they did not believe Andretti Global would be competitive or add value in 2025 or 2026.
Could pressure from American lawmakers make things happen? Maybe.
Francis said antitrust investigations could cause “reputational damage and the threat of intrusive legal injunctions” that big companies prefer to avoid. “So sometimes just threatening legal action or complaining to authorities can encourage the other party to reconsider their position. This makes antitrust a great negotiating lever, even if you may not win the case.
Andretti, once again, is a hot topic at this weekend’s Monaco Grand Prix.
Red Bull team principal Christian Horner said he was “surprised to see that Andretti followed this process” when asked about the letter from US senators calling for an investigation into F1.
While Horner said he would “absolutely” welcome Andretti Global to F1, he said “the most natural solution is for them to acquire an existing franchise if there is a desire to sell it.” Horner credited Liberty Media for building such strength into its model that “even the worst team in Formula 1 probably has a billion-dollar valuation.”
Alpine team principal Bruno Famin added: “A big name, Andretti-Cadillac. But we must be very careful not to dilute and preserve the value of the championship and that of the teams as well. And there are two ways: they buy a team or they bring enough value to the championship to compensate.
Some insiders believe that as the value of the F1 championship has increased since the 2020 signing of the Concorde Agreement setting the rules, the sport may want Andretti Global to pay more than the existing entry fee of 200 million of dollars.
When asked if he thought that would be reasonable, Mario Andretti replied in an interview: “They can ask. I don’t know if it’s legal to go beyond that at this point. So this is a questionable situation. I know what is currently part of Concorde. That’s what we’re willing to do… It seems like they want more, but they’ve never told us that specifically. We must therefore be told clearly what their demands are… But tell us. Don’t leave us in the dark.
“I don’t see how we couldn’t add some interest as an all-American team with the biggest automaker, the Cadillac brand, on our side. And increase the fan base already in place. I mean, it’s a no-brainer. You know it’s positive,” Andretti continued. “So I think we’re bringing something of value. It’s a big investment in the sport that we love.
In the United States, fan numbers have grown rapidly in recent years and this month’s Miami Grand Prix was the highest-rated F1 race ever by American viewers, according to ESPN.
The Senate letter was co-signed by Michigan’s two senators as well as Sen. Todd Young, R-Ind., where Andretti Global is based.
“The Andretti-Cadillac team joining Formula 1 would be a win for Michigan’s economy, support good-paying jobs in our state and likely increase Formula 1’s presence throughout our country,” said Senator Gary Peters , D-Mich., the chairman of the Senate Homeland Security and Governmental Affairs Committee. “We make the best cars in the world, including race cars, and so I fear there are behind-the-scenes efforts by our foreign competitors to prevent Americans from participating. We need answers, and I’m going to stick with this question to ensure this team gets its fair chance.
Klobuchar said F1’s popularity around the world made it “a major marketing advantage” for an American car brand.
“Being part of it is a marketing stunt,” she said. “So we don’t want a coup to stop them from participating in the marketing stunt.”