Janice R. Andrews
Through its subsidiary, Formula One Management (FOM), Liberty Media, the Colorado-based conglomerate that owns the commercial rights to the Formula 1 World Championship, has run afoul of the law. An antitrust inquiry investigating Liberty Media’s decision to reject Andretti Global and Cadillac’s application to join the Formula 1 grid in 2025 or 2026 has been initiated by the U.S. Department of Justice (DOJ). Members of the US Congress have been applying increasing pressure for months, culminating in a harsh letter from House Judiciary Committee Chairman Rep. Jim Jordan (R-Ohio).
History: The Liberty Media Decision and the Andretti Bid
The story started in 2021 when Michael Andretti, the son of the late Mario Andretti, missed out on a last-minute opportunity to purchase a majority stake in the Sauber Formula One team. Andretti was adamant about getting back on the Formula One grid despite this setback, and in February 2022 he submitted paperwork to Formula One officials to investigate the idea of joining the competition as an expansion team. Andretti had a grand plan: with the help of General Motors and its high-end brand Cadillac, he would establish a competitive Formula One team operating out of a state-of-the-art facility in Fishers, Indiana.
However, Liberty Media and other F1 players fiercely opposed Andretti’s bid. Fearing the financial fallout from an eleventh team, many of the current Formula One teams were against growth. The current teams contended that the admission of a new team may lower revenue for the sport and their part of the rich prize money and sponsorship deals offered by Formula One.
Discussion and Rejection from Liberty Media and the FIA
The Fédération Internationale de l’Automobile (FIA), which oversees Formula 1, declared in October 2023 that Andretti was the only applicant who satisfied all selection requirements for expansion, giving Andretti’s candidacy a significant boost in spite of the resistance. Andretti’s comprehensive submission was commended by FIA President Mohammed Ben Sulayem, who described it as the outcome of a “robust” due diligence procedure.
Andretti’s application was forwarded to Liberty Media and FOM for final consideration after receiving the FIA’s permission. Four months later, though, the bid was turned down by F1 officials who cited worries about Andretti’s team’s competitiveness and its effects on the sport.
F1 provided Andretti executives with a three-page determination letter outlining their reasoning for rejecting the application. According to the letter, Andretti’s entry was not likely to be competitive, the team might not have fully appreciated the project’s magnitude and difficulties, and it was not likely to benefit the sport or its present teams. Additionally, F1 contended that although there was some awareness of the Andretti name among F1 enthusiasts, the addition of an 11th team would enhance the Andretti brand’s worth more than the Championship itself.
Congressional Intervention and Andretti’s Reaction
Andretti and Cadillac retaliated swiftly against the F1 ruling. The team issued a statement expressing its strong disagreement with F1’s findings and reaffirming its dedication to developing a competitive American team in Formula One. “We are proud of the significant progress we have already made on developing a highly competitive car and power unit with an experienced team behind it, and our work continues at pace,” the statement continued.
Andretti Global made a big advancement in April 2024 when a new 50,000-square-foot facility near the UK’s Silverstone racecourse opened. The more than 100 workers committed to the F1 project would be based out of this facility. The Andretti family was unflinching in their pursuit of a position on the Formula One grid by 2026, even after the setback.
Lawmakers in the United States became interested in the debate over Liberty Media’s decision as it intensified. Mario Andretti visited Capitol Hill with Rep. John James (R-Mich.) less than two weeks after the new facility opened to speak with Congressmen and address Liberty Media’s potential antitrust breaches. The result of their efforts was a string of letters to Liberty Media and F1 officials from a bipartisan coalition of politicians voicing concerns about possible anti-competitive conduct associated with Andretti’s offer.
Liberty Media’s Defence and the DOJ Investigation
In the end, the DOJ decided to look into Liberty Media for possible antitrust breaches due to pressure from Congress. Liberty Media CEO Greg Maffei announced the probe and the company’s complete cooperation with the DOJ during a quarterly earnings call in August 2024. Additionally, Maffei supported Liberty Media’s decision, claiming that the business complied with all relevant antitrust rules in the United States.
“We believe our determination, F1’s determination, was in compliance with all applicable U.S. antitrust laws, and we’ve detailed the rationale for our decision vis-a-vis Andretti in prior statements,” Maffei stated to analysts. “We most definitely do not oppose the notion that any growth is incorrect. The FIA and F1 must both find that the requirements are satisfied in order for the expansion technique to be approved.”
Maffei stressed that Liberty Media was welcoming applications from newcomers, who might be accepted provided they fulfilled the prerequisites. But he insisted that the Championship would not benefit from the addition of an eleventh club on its own and that a newcomer would primarily add value by becoming a competitive squad.
The Investigation’s Wider Consequences
The DOJ’s Liberty Media probe has important ramifications for the Formula One World Championship as well as the larger sports sector. Liberty Media may be subject to harsh consequences, such as fines and other limitations on its commercial operations, if it is determined that it broke antitrust laws. Additionally, the study may establish a standard for how sports leagues manage club additions and expansion.
The probe gives Andretti Global a ray of optimism. The DOJ may require Formula One to reevaluate Andretti’s bid or even open the door for legal action against Liberty Media if it finds that the company’s actions were anti-competitive. The Andretti team is still working towards its Formula One goals in the interim, and they anticipate that the probe will help them get closer to their objective.
It is unclear how the probe would affect Formula 1 going forward and whether Andretti Global will be able to maintain a grid seat in the end. There is no doubt that everyone with an interest in motorsports, including fans, industry insiders, and legal experts, will be closely following this case’s outcome.
