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In January, it was announced that Andretti Global’s bid to join the F1 grid for 2026 had been rejected.
A detailed explanation for the decision was issued, which in itself raised questions.
Despite the rejection, the saga continues.
Andretti Global has carried on working towards an F1 berth, with Speedcafe revealing that it will take delivery of its first 2026-spec chassis in the coming weeks.
Meanwhile, Liberty Media is under investigation by the United States Department of Justice over anti-competitive behaviour – an investigation triggered by its refusal of Andretti’s entry.
Should it be found to have breached antitrust laws, Liberty Media could face severe penalties.
What is Liberty Media’s role in F1?
Liberty Media is the commercial rights holder of Formula 1, having acquired the business in January 2017.
Liberty itself is headed by Greg Maffei, with its F1 operation overseen by Stefano Domenicali via a company known as Formula 1 Management (for simplicity, there are a host of other companies involved in the structure).
As the commercial rights holder, Liberty is responsible for formulating the calendar, dealing with promoters, selling trackside advertising and commercial hospitality, and securing broadcast deals.
To facilitate that, it has rights to the imagery of each team, necessary for broadcast deals.
In exchange, it has agreed to compensate teams through a combination of financial rewards and other services (logistics, for example), as laid out in the Concorde Agreement.
It is a common misconception that the Concorde Agreement is a single document.
While that was once the case, it now has commercial and regulatory elements.
The current Concorde Agreements were signed in 2021 and run through to the end of next season, replacing the bilateral agreements that had been in place from 2013 (from 2013 to 2020, there was technically no Concorde Agreement).
An abridged history of F1’s commercial rights
At its simplest level, the Concorde lays out how Liberty Media distributes the sport’s riches and defines the roles and responsibilities of each party.
It is not, in itself, the commercial rights to Formula 1. That is covered under what is termed the 100-year agreement.
First signed in 2010, it followed what was initially a 14-year agreement between the FIA and ISC (a Bernie Ecclestone-controlled company technically owned by his family trust) in 1996.
A year prior, Ecclestone had acquired the broadcast rights to all FIA championships, a point which ultimately left both the FIA and Formula 1 Management in the cross hairs of the European Commission when complaints were made over the arrangement.
That ultimately left Ecclestone with only the rights to F1, the World Rally Championship, and the Regional Rally Championship, the latter two through ISC, (which he sold to David Richards in 2000), and the former though Formula 1 Management (FOM).
The initial complaints sparked the European Commission’s interest amid concerns surrounding conflicts between the commercial and regulatory sides of Formula 1 (among others).
At the time, along with his role managing the commercial rights to Formula 1, Ecclestone had a seat on the FIA Senate and was FIA vice-president for promotional affairs.
In short, the sport’s commercial boss also had regulatory responsibilities and influence.
On top of that, there were clauses in commercial contracts between FOM and broadcasters that rewarded them for not showing rival competitions (IndyCar in particular).
The European Commission took a dim view and a 2001 report made clear that changes were necessary.
As a result, Ecclestone relinquished his roles with the FIA and a revised agreement between the FIA and Formula 1 Management, the 100-year agreement (which came into force for 2010), was drawn up.
Those developments were enough to satisfy the European Commission that the commercial and regulatory elements of Formula 1 were, from that point in time, entirely separate.
“The proposed changes to the regulatory framework and to the commercial arrangements appear to the Commission to introduce sufficient structural remedies minimising the risk of possible future abuse,” the Commission reported.
“The new rules introduce a separation of commercial and regulatory activities in motor sport, which the FIA intends to make effective, inter alia, through the appointment as from 2010 of a ‘commercial rights holder’ for 100 years.”
Further to that, it also stated: “…the Commission has been assured that the FIA rules will never be enforced so as to prevent or impede a competition or the participation of a competitor, save for reasons inherently linked to FIA’s regulatory role of maintaining safety standards.”
In the interim, a 10-year deal was agreed that saw the sport’s rights managed in line with the European Commission’s report.
Separation of commercial and regulatory responsibilities
The 100-year agreement coincided with the fifth edition of the Concorde, and serves to highlight the separation between the commercial rights holder and the FIA, as mandated by the European Commission in its 2001 finding.
This was far from lip service, with a dispute between the FIA and a company called Phoenix Finance demonstrating as much.
In 2002, as the Prost Grand Prix team collapsed and a company named Phoenix Finance attempted to acquire its assets and intellectual property in an effort to take its place on the F1 grid.
It was refused entry into the championship and the situation deteriorated to the point that Phoenix took legal action against the FIA and Formula 1 Management.
Phoenix lost that case, the outcome of which is largely beside the point save for it highlighting that, at that point, there was separation in F1.
“Whilst the FIA is the owner and regulator of F1, FOM is the commercial exploiter,” the judgment noted.
Further, it included quoted testimony from FOM’s then-legal head, Sacha Woodward Hill, who stated, “…FIA alone determines and controls whether Phoenix (or any other entrant) can compete.
“FOM and FOA have nothing to do with deciding this: if FIA announces that an entry has been accepted and that a certain team can compete, that is the end of the matter as far as FOM and FOA are concerned.”
Those comments demonstrate that there was no right for the commercial rights holder to have a say on entrants in any way in 2002.
That can be taken to mean there was no such clause in either the Concorde Agreement (which ran from 1998 to the end of 2007) or the 10-year commercial deal that was negotiated between the FIA and FOM in 2001.
While the contents of the Concorde Agreement that followed (from 2007) are not public knowledge, it is understood that there was no clause or compulsion to have signed a commercial agreement with Ecclestone.
A subtle change in position
In 2010, four new teams entered F1: Manor (which raced initially as Virgin Racing), Lotus Racing (which became Caterham), Hispania Racing Team, and the stillborn USF1 project.
It’s unknown whether there was any facility for the commercial rights holder to reject their entries, though that seems unlikely given the situation was largely forced through by then-FIA president Max Mosley against the wishes of Ecclestone.
Of those teams, the tenure of Manor, in particular, offers some further insight.
As the 2010 Concorde expired at the end of 2012, the beleaguered British squad ran much of the 2013 season without a commercial agreement (there was essentially no Concorde; from 2013 to 2020, teams signed bilateral deals with the commercial rights holder and the sport ran largely to a memorandum of understanding).
That meant it was not eligible for logistical assistance or prize money, but it was equally entitled to compete – though it must be highlighted Manor was an existing rather than a new entrant.
Eventually, a deal was struck in October 2013.
Haas joins Formula 1
Just six months later, it was announced that Haas had been approved to join the grid, ultimately doing so in 2016.
Sources have confirmed that the American-registered team required the approval of Ecclestone to do so, which highlights a fascinating change in position and one seemingly at odds with the European Commission’s 2001 ruling.
The likely trigger for this was the risk Manor posed by competing without a commercial agreement, as it left FOM without the rights to the team’s imagery.
While things never deteriorated such that it became an issue, it was an exposure that was seemingly covered off with Haas and the apparent need for commercial approval.
The need for Ecclestone’s green light for the new team must, however, be taken with a grain of salt, as the diminutive Brit played two key functions in F1 at the time.
Alongside his role as head of the commercial rights holder, he was also part of the F1 Strategy Group.
It’s unclear from which of Ecclestone’s roles approval was necessary.
In his book, Unfiltered, Guenther Steiner recounts in some detail the process of applying for a license for the team and fronting an FIA panel.
He also notes that the final approval came following a presentation to the sport’s governing body, with Charlie Whiting confirming the team’s admission.
There is no reference to a subsequent commercial negotiation or obligation, though admittedly the process then was different to what it is now as the relationship between the FIA and the commercial rights holder was far more cordiale.
Haas’ approval was received in April 2014, without any overt commercial assessment (at least publicly). One can, therefore, deduce that there was likely some form of veto right or influence existed at that point.
Conflicting claims
However, it’s also been claimed to Speedcafe that the veto power is imbued in the 100-year agreement, which was signed in 2010.
The 100-year agreement is the deal that ultimately empowers Liberty Media with the commercial rights to F1.
Negotiated well before Liberty’s arrival, it was worth a reported USD $360 million plus an annual contribution to the ongoing role of the FIA as the championship’s regulator.
Given that was first signed in 2010, if the right is indeed part of the 100-year agreement, it must be an amendment to the original document.
Alternatively, it’s been claimed to be part of the most recent edition of the Concorde Agreements, which came into force in 2021, the point at which the much-lauded USD $200 million anti-dilution fee was introduced.
Contradicting the EU Commission
Whatever the reality is with regard to timing, there is no doubt that the commercial rights holder now holds veto power over new entrants – Andretti Global’s plight demonstrates that perfectly.
And that begs the question: given the European Commission and that clearly separation between commercial and regulatory roles once existed, what changed, why, and does it hold water in the face of that 2001 judgement?
A commercial rights holder exercising regulatory power could be considered a breach of competition laws and appears to directly contradict the 2001 European Commission outcome.
It is against this backdrop that Liberty Media finds itself under investigation by the Department of Justice in the United States over antitrust concerns.
In the United States, antitrust breaches are a big deal, with the NFL recently in the headlines for breaches.
Though the specifics of its case are markedly different from those facing F1, the scale of the initial judgment highlights the attitudes the US system holds towards antitrust breaches.
In that instance, the NFL was initially fined USD $4.7 billion following a class action over the way it distributed out-of-market matches via a premium subscription service.
Though subsequently overturned on appeal, federal antitrust laws in the United States can see damages tripled, which would have left the league facing USD $14.4 billion in penalties.
It’s unclear where the Department of Justice investigation into Formula 1 and the Andretti denial stands and what conclusion it might reach.
What is clear is that Formula 1 Management’s ability to reject Andretti’s entry demonstrates it wields a regulatory power, something which was ruled against more than 20 years ago by the EU Commission.
In the intervening years something has changed, though exactly when, where, and how remain shrouded in secrecy.
As for its legality, that is for the Department of Justice or other such bodies to determine.
In the meantime, F1 will travel to the United States this weekend for the first time since it the investigation was launched.
Speedcafe contact both the FIA and F1 for comment but none had been received at time of publishing.
