Toto Wolff says Cadillac didn't pay enough to enter Formula 1

For a long time, the very idea of ​​the arrival of an eleventh stable in Formula 1 was causing some teeth to grind. When Andretti tried to defend his candidacy, the ten teams already present in the discipline showed fierce opposition, for economic reasons in particular. Indeed, the arrival of a new team meant that the teams would share the cake – that is, the revenues and TV rights – between eleven, and no longer ten. Not to mention the valuation of the existing teams which, inevitably, would lose value with the introduction of a new team.

Arguments that, at first, were enough for FOM to refuse Andretti's entry in early 2024. Finally, a few months later, Formula 1 gave in and accepted the arrival of... Cadillac and General Motors from 2026, with the Andretti mention erased, in the face of the arguments of the American group and its promise to design its own powertrain by 2028. In addition, in order to convince FOM, Cadillac had to pay an anti-dilution tax – designed to compensate for the indirect loss of money of the ten other teams – of around $450 million, much more than the $200 million included in the Concorde Agreements.

« For now, we are losing"

A sum still not sufficient, according to Toto wolff. The Main Team of Mercedes believes that this entry ticket to Formula 1 is not high enough and that the sum of 450 million dollars – which will be divided into ten to be distributed to the ten other teams – does not compensate for the losses linked to the arrival of Cadillac in 2026. "For now, we are losing, he told the German media Auto Motor und Sport. We don't know what Cadillac is going to invest in Formula 1. The anti-dilution tax, currently set at $450 million, is too low. It doesn't compensate for the direct loss of revenue."

"Only time will tell what value the sport will derive from the presence of an eleventh team, concedes the Austrian leader, who hopes that Cadillac will bring freshness and therefore interest to Formula 1. If the value of the sport increases, everyone will benefit. But we don't know that yet. If Cadillac now commits to a factory team and invests an appropriate marketing budget in Formula 1, it will be a valuable asset to the sport."

However, at the moment, Mercedes is not to be pitied: according to Sportico, the German team is valued at around four billion dollars and made $142 million in profit for the 2023 financial year. Toto Wolff assures that Formula 1 has never been as profitable as it is today. "We are making solid profits. Our profitability margin is 30 to 35% before taxes, which even offsets our engine expenses., explains Mercedes' chief executive. The old cliché that Formula 1 is a money pit is now a thing of the past. In short, Formula 1 has never been as financially healthy as it is today.

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