Ben Sulayem Willing to Compromise on $100 Million to Grab More Power Over Formula 1

The ongoing power tussle between the FIA and F1 is beginning to take an ugly turn. The two bodies have been at loggerheads recently because of two key issues. First involves F1’s potential sale of their commercial rights and second involves Andretti’s potential entry to the sport. Senior F1 journalist Mark Hughes has tried to make sense of the entire saga and he finds Mohammed Ben Sulayem’s ambitious over-reach to be a major reason for contention.

Hughes, in a recent episode of The Race F1 Podcast, recalled the 100-year lease agreement between the FIA and F1. The agreement signed in 2010 during Bernie Ecclestone and Jean Todt’s era forbids the ruling body from interfering in F1’s commercial rights.

In return, the FIA gets $100 million each year. Mohammed Ben Sulayem, as per Hughes, is unhappy with both the duration as well as the $100 million compensation. Hughes’ fellow guest on the podcast, Scott Mitchell-Malm, then highlighted a pressing issue that could arise from the ongoing disagreements. Malm said,

“There’s ego on both sides, there’s entitlement on both sides. And even though I think F1 and FIA, by and large, think they’re acting in the best interest of the championship, I don’t really think their actions actually are in the best interest of the championship some of the times. The longer this drags out, the more it has the potential to impact the current Concorde negotiations for the new agreement.”

Things began to heat up between the two bodies earlier last year. Liberty Media was reportedly in touch with a Saudi-based consortium for a potential $20 billion sale for F1’s commercial rights.

Mohammed Ben Sulayem, at the time, dubbed the $20 billion valuation “inflated”. Formula One Management (FOM) threatened to sue the FIA president if he continued to pass comments on matters pertaining to the sport’s commercial rights.

Soon after, the two parties again began to have a massive dispute over Andretti’s entry. Amid that tussle, Ben Sulayem made a tall claim of FIA being the championship’s “landlord” that leased it to third parties.

Why has Andretti’s potential entry caused a rift between the FIA and F1?

One of Mario Andretti’s passion projects at 83 years of age is to enter F1 as an 11th team. In pursuit of that dream, the former F1 champion signed a deal with General Motors.

He even broke the ground in Indianapolis for a state-of-the-art facility. However, neither incumbent F1 teams nor the FOM seems too curious to have an 11th team enter the championship.

FIA, on the other hand, believes the American team has fulfilled every criterion that one needs to as per the current Concorde Agreement to join the championship. In furtherance of that assessment, the ruling body granted its approval last year.

| Formula 1 teams are pushing to triple the $200m anti-dilution fee to $600m that an 11th entrant such as Andretti will have to pay in order join the world championship.

If agreed the new number could force Michael Andretti to reconsider his plans to enter a new team. pic.twitter.com/irI9zUtYaQ

— RBR Daily (@RBR_Daily) February 26, 2023

The majority of the existing F1 teams are strictly against the entry owing to the dilution in prize money. F1 boss Stefano Domenicali has registered his own concerns. He doubts the new entrant will provide a significant value addition. Moreover, he also raised concerns over the longevity and stability of a new team.

The F1 boss’ comments weren’t taken kindly by Andretti, however. The motorsport giant was reportedly contemplating launching a lawsuit against the FOM under the competition laws in the European Union. FIA granted its approval after the emergence of such reports. Response from the FOM has remained lukewarm, though.