As part of the upcoming Concorde Agreement, Formula 1 is considering the conditions for new teams to join the premier class of motorsport. It’s clear that existing teams want to raise the bar further. The proposal is that a newcomer should compensate existing teams with a minimum of $600 million. Moreover, they would not be entitled to prize money in their first season.
The new Concorde Agreement is set to take effect from 2026, outlining all commercial agreements. Discussions between the teams and the commercial rights holder, Liberty Media, have already begun.
A crucial part of these discussions is the set of requirements for potential newcomers. This is currently a contentious issue, given the challenges faced by Mario Andretti in securing a spot on the grid.
Dilution Fund
Currently, there is a so-called dilution fund. A new team must make a one-time payment into the fund of $200 million to compensate for the loss of commercial revenue of the current ten teams. However, sources in the paddock confirm that teams want the conditions to be adjusted.
One of the ideas on the table is to increase the amount to at least $600 million, spread over a period of five years. In addition, a new team would not be eligible for prize money in their first season.
The tightening of admission requirements would make it significantly less attractive for a new team to join. Conversely, taking over an existing team would become more appealing. This would prevent further pressure on the commercial revenue model of the current teams.
