If a new team wishes to join Formula 1 then they must pay an entry fee, also known as an anti-dilution fee.
This fee is split between the current F1 teams, making up for the loss of income that will be caused by the prize pot being split a further way following the grid’s expansion.
The current entry fee for a new team is $200m as per the Concorde Agreement, which runs until 2025, at which time a new agreement will be negotiated.
Andretti-Cadillac, who have formally begun the process of joining the grid with the FIA, are looking to make the leap to F1 in 2026, meaning that they will be subject to the new Concorde Agreement rather than the current one.
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It has been rumoured that due to the growth of F1 over the past couple of seasons, partly due to the success of Netflix’s Drive to Survive, that the anti-dilution fee could increase under the next Concorde Agreement.
The $200m fee is reportedly set to triple to $600m, an eye watering amount that may put Andretti-Cadillac off joining the grid, should they even be able to fork out this huge fee.
The good news for Andretti-Cadillac is that this increase in entry fee costs may actually be illegal, with the EU set to intervene in line with their anti-competitive laws.
F1 have suggested that this entry fee would actually be a franchise fee, as many teams in US sport have to pay to join divisions such as the NBA and MLS.
The F1 fees cannot be considered a franchise fee however, as the money paid by Andretti-Cadillac will be split between the teams and not actually go to the sport’s owners, Liberty Media.
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The EU can intervene with their anti-competitive law if they believe that EU consumers are disadvantaged by business activities conducted within the EU, regardless of whether the entities are EU registered or not, as noted by RacingNews365.com.
An argument could be made that EU consumers would be disadvantaged if F1 only had 20 cars on the grid, rather than allowing 22, meaning that they would be able to intervene.
With F1 and the FIA still disagreeing about the potential expansion of the grid, only time will tell if Andretti-Cadillac will achieve their dream of becoming an F1 team.