Michael Andretti's dream of becoming a Formula One team owner was dealt a significant blow

Wednesday when the sport's commercial arm rejected Andretti Global's proposal to join the grid in
2025 or 2026. The door has been left ajar for Andretti to enter F1 with a General Motors-built
engine in 2028, but for a team that has claimed it is ready to make its debut next year, four years on
the sidelines will feel like an awfully long wait.

F1's reasons, which were documented in a lengthy statement, boil down to a belief that an 11th team
alone (i.e. without a power unit manufacturer) would not bring enough value to the sport to
warrant the upheaval of its addition.

The underlying reasons were a combination of F1's doubts over the competitiveness of the Andretti
bid, the fact that it would rely on an existing F1 engine manufacturer being forced into a supply deal
until GM is ready with its own engines, and the belief that "F1 would bring value to the Andretti
brand rather than the other way around." Part of the statement's conclusion stated that F1 was
unable to identify "any material expected positive effect" on the sport's financial results as a result
of the addition of Andretti to the championship in 2025 or 2026.

The series' decision was in part based on Andretti's responses to a series of questions about its
application set out in what F1 called its process letter -- a document sent to the applicant outlining
the process for applying. Andretti submitted its responses to F1's process letter questions on Oct. 24
but, according to F1, did not take up an opportunity to present its case at a proposed in-person
meeting on Dec. 12.

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F1 conducted an analysis of Andretti's proposal by consulting key stakeholders, such as

broadcasters, sponsors and circuits, which represent the vast majority of sport's revenue stream. It
went on to stress that its process did not consult F1's 10 existing teams, which are known to be
against Andretti's addition for reasons largely of self-interest.
The primary argument from rival teams has been that Andretti's arrival would dilute the prize fund
derived from F1's revenues and that the existing $200 million anti-dilution fee that Andretti would
pay on entry to the sport has been set too low to adequately compensate them. However, the issues
of prize-fund dilution and the anti-dilution fee (which will likely be hiked up by the time Andretti
gets another shot at entering in 2028) were not mentioned in F1's reasons for rejecting Andretti.

F1 raises doubts over Andretti's competitiveness

The crux of F1's decision was based on its belief that Andretti would not be competitive if it joined
in 2025 or 2026. It stated that for an 11th team to bring a significant benefit to the championship
and be admitted, it would need to fight for podiums and race wins. The sport's research suggested
that level of results would move the needle in terms of increasing fan engagement and therefore the
value of the sport to stakeholders such as broadcasters and circuit promoters.

Peeling back the next layer of the onion, there were two main reasons F1 doubted Andretti's ability
to be competitive: The fact that it would rely on an engine supply deal for the first few years of its
existence and the fact that it would have to build two vastly different cars to two different sets of
regulations in 2025 and 2026, when new rules will be introduced.

"We do not believe that there is a basis for any new applicant to be admitted in 2025 given that this
would involve a novice entrant building two completely different cars in its first two years of
existence," F1's statement said. "The fact that the applicant proposes to do so gives us reason to
question their understanding of the scope of the challenge involved.

Michael Andretti, right, had his bid to join the Formula One grid in 2025 and 2026 rejected by the series on Wednesday.
Bob Goshert/For IndyStar / USA TODAY NETWORK
"While a 2026 entry would not face this specific issue, it is nevertheless the case that Formula One,
as the pinnacle of world motorsport, represents a unique technical challenge to constructors of a
nature that the applicant has not faced in any other formula or discipline in which it has previously
competed, and it proposes to do so with a dependency on a compulsory [power unit (PU)] supply in
the initial years of its participation.

"On this basis, we do not believe that the applicant would be a competitive participant."

On the face of it, that seems like an overly harsh assessment. Six of the existing ten F1 teams
currently have engine supply deals and all ten will have to adapt to F1's new regulations in 2026 --
many of whom are unlikely to achieve anything close to guaranteed podiums or wins.

Andretti has already tested a 60% scale model in Toyota's wind tunnel in Cologne, Germany to
comply with the current regulations and insists it would be ready to compete as early as 2025 if
accepted. What's more, if the application were delayed by a single year to 2026, Andretti wouldn't
have to build a car to the current regulations at all, and would then have the same amount of time
as every other team from this point forward to develop a car for the start of the new era of
regulations in 2026 (full details of which have yet to be published).

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This is where the power unit argument comes in.

While six of the existing teams are customers of engine suppliers, none has reached those deals by
entering the sport and demanding an engine supply in the knowledge that it will switch to a works
deal three years later. A mechanism exists in the regulations to ensure every team in the
championship has a power unit supply, whereby the engine manufacturer with the least customers
is obliged to reach a deal with the team lacking a supply deal. The rule was introduced when Red
Bull was struggling to find an engine supplier in the mid-2010s, designed to ensure no team was
unable to compete because rivals had been unwilling to offer up a supply deal. For 2025, Renault,
which currently only supplies its works Alpine team, would be the manufacturer in question and
actually held talks with Andretti about a supply deal before GM was announced as a partner.

While that means an 11th team could guarantee itself a supply deal under the regulations, F1 argues
that any manufacturer working with Andretti would be reluctant to form a close partnership with
the team in the knowledge that GM plans to join in 2028 and could have indirect access to its
intellectual property. Combined with the other difficulties Andretti would face getting up to speed,
F1 believes a "compulsory" supply deal would make it incredibly difficult for Andretti to be
competitive.

In its conclusion, F1's statement went on to claim that a compulsory supply deal would be
"damaging to the prestige and standing of the championship."

Renault would have been forced to supply Andretti with power units until GM began manufacturing engines for the team in 2028.
FRANCK FIFE/AFP via Getty Images

And as an apparent word of warning to GM, F1 stated: "Coming to the sport as a new PU
manufacturer is also a huge challenge, with which major automotive manufacturers have struggled
in the past, and one which can take a manufacturer a number of years of significant investment in
order to become competitive. GM have the resource and credibility to be more than capable of
attempting this challenge, but success is not assured."

An entry in 2028 still possible

Regardless of whether you agree with F1's assessment of Andretti's bid, most of the arguments will
be harder to apply in 2028 when GM has pledged to produce its own engines under its Cadillac
brand, removing the need for a compulsory supply deal. Some of the concerns about
competitiveness might still be made, but it's hard to imagine many stronger proposals to become an
11th team than one that has had more than four years to prepare with the help of one of the biggest
auto manufacturers on the planet.

Although it was still fairly non-committal in its wording, F1 did acknowledge that a fully fledged
Andretti-Cadillac deal could pass the test for added value.

"We would look differently on an application for the entry of a team into the 2028 championship
with a GM power unit, either as a GM works team or as a GM customer team designing all
allowable components in-house," the statement read. "In this case, there would be additional
factors to consider in respect of the value that the applicant would bring to the championship, in
particular in respect of bringing a prestigious new [Original Equipment Manufacturer] to the sport
as a PU supplier."

Whether Andretti is prepared to wait that long following its latest snub remains to be seen. It's one
thing running a team and benefitting from the income derived from sponsorship and prize money
to support car development, but quite another to pour money into a project for another four years
without a cast-iron guarantee that you'll have a place on the grid at the end of it.