Formula One Rejects Andretti, General Motors Team Bid: What This Could Mean For US Growth, ESPN's Media Rights
Formula One rejected a proposal to add an all-American team to the racing series — a move that could stymie growth in the U.S.
What Happened: Formula One, which trades as Liberty Formula One Group (NASDAQ:FWONA)(NASDAQ:FWONK), nixed a proposal by former Formula 1 driver Michael Andretti.
Andretti, who is part of one of the most famous racing families in history, teamed up with General Motors Company (NYSE:GM) unit Cadillac on a joint bid to join the league in 2025 or 2026.
The Andretti proposal included the reliance on using Renault engines in the short term.
Formula One left the door open for Andretti to join the league in 2028 if his team uses GM racing engines, according to ESPN.
Related Link: Ford Is Returning To Formula 1: Here Are The Details And Why It Could Help The Company
Why It's Important: There are currently 10 Formula One teams with Haas F1 the only listed American team. Haas F1 also has other headquarters in Europe and sees most of its key racing parts built outside the U.S.
Logan Sargeant, who races for Williams Racing, is the only American driver in Formula One. The driver was the first American driver to score points in Formula One in over 30 years during the 2023 season.
Andretti is the last American driver to have a Formula One podium with a third-place finish in 1993. Michael's dad, legendary racer Mario Andretti, won the 1978 Formula One title (12 of the 22 races won by American drivers).
Viewership for Formula 1 races has grown in recent years and led to a large increase in the media rights deal signed by the league. ESPN, which is a unit of The Walt Disney Company (NYSE:DIS), secured the renewal of the U.S. rights in 2022. The media company is paying an estimated $75 million to $90 million annually for the rights for three years.
ESPN beat out several other interested parties, including Amazon.com Inc (NASDAQ:AMZN).
Amazon is rumored to have offered up to $100 million annually but would have made all the races exclusive to streaming.
A recent report linked technology giant Apple Inc (NASDAQ:AAPL) to securing the global rights to Formula One and willing to pay around $2 billion annually. This total would come in around double what the league gets from its various deals with media partners in different regions.
Along with recent growth in viewership in the U.S. Formula One teams have also experienced increased interest in ownership stakes from investors, including several notable American football players.
The Alpine racing team received investments in 2023 from Kansas City Chiefs players Patrick Mahomes and Travis Kelce, professional golfer Rory McIlroy and actor Ryan Reynolds.
"I am thrilled to lead an investor group and join forces with Patrick and the team at Otro Capital on this exciting venture with Alpine F1," Kelce said at the time.
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