When the Andretti racing team recently got in touch with a U.S. congressman to discuss Formula 1’s shocking move to reject its bid to join the grid, it piqued interest.
A legendary American team racing in the pinnacle of motorsport, with an engine built by a U.S. automaker? That could provide rocket fuel to the GM and Cadillac brands, a boon to the domestic economy and a chance for American glory in the popular global sport.
WATCH ANYTIME FOR FREE
 |
Stream NBC10 Boston news for free, 24/7, wherever you are. |
Then things escalated rapidly.
The congressman, Rep. John James, R-Mich., teamed up with a dozen lawmakers in both parties to write a letter to the American owner of Formula One Group, Liberty Media, demanding answers for why it rejected Andretti. In blistering remarks to reporters outside the Capitol on May 1, James accused F1 of “cartel-like behavior” and anti-competitive actions to protect the largely European teams from U.S. competition.
Get updates on what's happening in Boston to your inbox. Sign up for our News Headlines newsletter.
“Mr. Andretti’s people reached out to our office to schedule a meeting to discuss the exclusion of an Andretti Motors GM-built car in F1,” James' spokesperson Noah Sadlier said. “GM is big in our district, so this obviously was of interest to Rep. James.”
Within days, House Judiciary Chair Jim Jordan, the Ohio Republican firebrand and a viewer of the Netflix series "Drive To Survive," launched an inquiry. Committee staff have since met with representatives for Liberty Media, a source with knowledge of the probe said. Jordan’s 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 breach of U.S. antitrust law. The Justice Department and the Federal Trade Commission confirmed they received the letter.
“I think there is a strong case to make or we wouldn’t have sent this letter,” Klobuchar told NBC News. “American teams driving American cars should have the same opportunities to compete. And I’m very concerned that there may have been collusion to avoid competition from Andretti on the race track and competition from Cadillac in selling cars.”
Standing next to the members of Congress at the May 1 news conference was racing legend Mario Andretti, the 1978 F1 world champion and the patriarch of the Andretti racing dynasty, who said he was invited by the lawmakers to join them.
Andretti’s visit to Washington, which included meetings with multiple lawmakers, raised eyebrows in the world of Formula 1. This was a dispute between a sports league and an aspiring competitor. Why was the United States government getting involved with threatening demands of F1 management and owners?
Days later, during a VIP reception at the Miami Grand Prix weekend, Andretti and Liberty Media CEO Greg Maffei crossed paths.
It didn’t go well.
As Andretti recalled to NBC News, Maffei broke into a conversation he was having and told him, “Mario, I want to tell you that I will do everything in my power to see that Michael never enters Formula 1,” a reference to his son Michael Andretti, who is leading the team’s application. The elder Andretti was stunned.
A source close to Liberty Media disputed that version of events, saying it was Andretti who approached Maffei, and that Maffei told him that F1 turned down Andretti Global’s application for good business reasons.
That interaction could have legal consequences.
“The Andretti anecdote, if true, raises one critical question: Why was Maffei opposed to Andretti’s bid?” 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, there’s no problem. The antitrust laws don’t say you have to be nice to people at parties. But if the opposition was for personal reasons, or to keep monopoly profits at the expense of consumers, then it’s ammunition for Andretti’s claims.”
More broadly, Francis said: “Antitrust cases live or die on evidence about effects: specifically, effects on consumers. There are really just two questions here: Are the membership rules in consumers’ best interests? And were they applied fairly? If so, [F1 management] has nothing to worry about. If not, 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 stringent criteria” set forth “in all material respects.” But a few months later, in January, F1’s commercial side rejected it, concluding that it did not believe Andretti Global would be competitive or add value in 2025 or 2026.
Could the pressure from U.S. lawmakers move the needle? Maybe.
Francis said antitrust investigations could cause “reputational damage, and the threat of intrusive court injunctions” that major companies prefer to avoid. “So sometimes just threatening a lawsuit, or complaining to enforcers, can encourage the other side to reconsider its position. That makes antitrust a great bargaining lever, even when you might not win the case.”
Andretti, 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 have gone down this process” when asked about the letter from U.S. senators calling for a probe into F1.
While Horner said he’d “absolutely” welcome Andretti Global into F1, he said “the most natural solution is for them to acquire an existing franchise should one want to sell.” Horner credited Liberty Media for building so much strength in its model that “even the worst team in Formula 1 probably has a billion-dollar valuation.”
Alpine team principal Bruno Famin added: “Big name, Andretti-Cadillac. But we have to be very careful not to dilute and to preserve the value of the championship and for 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 speculate that because the value of the F1 championship has gone up since the 2020 signing of the Concorde Agreement setting the rules, the sport may want Andretti Global to pay more than the existing $200 million entry fee.
Asked if he thinks that would be reasonable, Mario Andretti said in an interview: “They can ask. I don’t know if it’s legal to go beyond that at this stage. So that’s the debatable situation. I know what is part of the Concorde right now. That’s what we’re prepared to go with... It’s out there that they want more, but they never told us specifically. So we need to be told clearly what their demands are.. But tell us. Don’t keep us in limbo.”
“I cannot see how we cannot be adding some interest as an all-American team with the largest auto manufacturer, the Cadillac brand, with us. And increasing the fan base that is already in place. I mean, that’s a no brainer. You know that that’s a positive,” Andretti continued. “So I think we’re bringing something of value. It’s a big investment in the sport that we love.”
Across the U.S., the fan base has grown rapidly in recent years and this month's Miami Grand Prix was the highest-rated F1 race on record with American viewers, according to ESPN.
The Senate letter was co-signed by both of Michigan’s 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 grow Formula 1’s presence throughout our entire country,” said Sen. Gary Peters, D-Mich., the chair of the Senate Homeland Security and Governmental Affairs Committee. “We make the best cars in the world, race cars included, so I’m concerned that there are efforts happening behind the scenes by our foreign competitors to prevent Americans from participating. We need answers, and I’m going to stay on this issue to ensure this team gets its fair shot.”
Klobuchar said the popularity of F1 around the world makes it “a major marketing plus” for an American auto brand.
“Being part of it is a marketing coup,” she said. “And so we don’t want a coup to keep them out of the marketing coup.”
This article first appeared on NBCNews.com. Read more from NBC News here:
