Liberty Media under investigation over anti-trust violations after denying Andretti F1 bid

Three months after receiving letters from members of the US Congress — including one from Rep. Jim Jordan (R-Ohio), the chairman of the House Judiciary Committee — scolding and questioning their decision to deny Andretti Global and Cadillac the chance to join the Formula 1 grid in 2025 or 2026, Libery Media noted in a quarterly earnings call Thursday that it is facing an investigation from the US Department of Justice for related anti-trust violations.

Greg Maffei, the CEO of the Colorado-based company that, through its subsidiary Formula One Management owns the commercial rights to the F1 World Championship, noted on the call that Liberty Media would cooperate with the DOJ and was confident Liberty hadn’t run afoul of any regulations regarding its Andretti decision.

“We believe our determination, F1’s determination, was in compliance with all applicable US antitrust laws, and we’ve detailed the rationale for our decision vis-a-vis Andrett in prior statements,” Maffei told Wall Street business analysts. “We are certainly not against the idea that any expansion is wrong. There is a methodology for expansion that requires approval of the FIA ​​and the F1, and both groups have to find the criteria met.

“We’re certainly open to new entrants making applications and potentially being approved if those requirements are met.”

The years-long process began in 2021 with Michael Andretti losing out on an 11th-hour deal with Sauber to purchase a controlling interest in its F1 outfit that soon will be controlled outright by Audi. In February of the next year, Mario Andretti announced that his son had filed paperwork with F1 officials to inquire about joining the grid as an expansion franchise, first revealing to IndyStar that Andretti would plan to build its cars out of its now-under-construction affairs headquarters in Fishers.

After a series of tests, public back-and-forths with Libery and F1 series officials, as well as many of the team owners — most of whom have been vehemently against expansion to protect the financial solvency of the 10 current teams and their sky -rocketing valuations — through much of 2022, the FIA ​​in early 2023 announced it would open an ‘expressions of interest’ process where prospective new team owners could apply for clearance to join the F1 grid. After receiving the support of General Motors and its luxury racing brand Cadillac to run tandem in the project, Andretti would be the only team given the green light by the FIA ​​in October of last year.

“Andretti Formula Racing LLC was the only entity which fulfills the selection criteria that was set in all material respects,” FIA president Mohammed Ben Sulayem said at the time, regarding the FIA’s “robust” due diligence process. “I congratulate Michael Andretti and his team on a thorough submission.”

Andretti and GM’s application was then passed on to Libery Media and FOM for further review, as any new entrants to the F1 grid have to be jointly agreed upon by both the sporting and commercial sides in order to gain full clearance. Four months later, F1 dressed down Andretti’s application in a thorough denial, stating the entry was unlikely to be competitive; that its stakeholders likely didn’t understand the scope and difficulty of the project; that it was unlikely to add value to the sport and its current 10 teams; and that the Andretti brand was more likely to gain from admission than vice versa.

From Jauary: F1 rejects Andretti Global’s bid to join in ’25 or ’26, leaves door open for future

“Our assessment process has established that the presence of an 11th team would not, on its own, provide value to the Championship,” F1’s wrote in a three-page decision letter sent to Andretti officials. “The most significant way in which a new entrant would bring value is by being competitive. We do not believe that the Applicant would be a competitive participant.

“While the Andretti name carries some recognition for F1 fans, our research indicates that F1 would bring value to the Andretti brand rather than the other way around. … We do not believe that the applicant has shown that it would add value to the Championship. We conclude that the Applicant’s application to participate in the Championship should not be successful.”

In a statement in response that same day in January, the team said in a statement that it “strongly disagreed” with F1’s findings. “Andretti and Cadillac are two successful global motorsports organizations committed to placing a genuine American works team in F1, competing alongside the world’s best,” the pair said in the statement. “We are proud of the significant progress we have already made on developing a highly competitive car and power unit with an experienced team behind it, and our work continues at pace.”

In April of this year, the team opened a new nearly 50,000-square-foot facility near the legendary Silverstone race track in the UK out of which its more than 100 F1 project-focused employees would work out of moving forward. According to Mario Andretti, Michael’s famous father and the 1978 F1 champion, all the work of the last several years boils down to the next year or so. Despite F1 and Liberty saying they’d be willing to potentially reconsider Andretti Global’s bid once Cadillac can produce its own power unit for the project in 2028, the elder Andretti told reporters in April at Long Beach that the team’s F1 prospects were boom-or- bust for a 2026 entry point, so as not to be forced to pay hundreds of millions more in a steep entry fee that would be split among the 10 current teams to offset their losses as F1’s marketing dollars would begin to be split 11 ways instead of 10.

“The point is, right now, the Concorde Agreement that’s in place, that’s the valid one. They want to come up with a different one after the end of 2025, but we started this process over two years ago, and we’re going under the current Concorde Agreement,” Andretti said. “We didn’t build, we didn’t do everything, we didn’t invest to be here in 2030.

“The objective was to be on the grid in 2024 when we started. Then it’s 2025, and now it’s 2026. But this has got to happen. We’ve invested knowing that we’re going by the book, and I don’t want to hear about the new one. Throw everything you want around, but that’s a different story. We’re going by what’s in place now.”

‘If they want blood, I’m ready’: Mario Andretti offended by FOM’s rejection of Andretti Cadillac bid

Less than two weeks later — and just days ahead of a planned meeting with F1 officials at the Miami Grand Prix to further discuss the issues at hand — the elder Andretti was on Capitol Hill with Rep. John James (R-Mich.) to meet with various members of Congress to discuss Liberty’s purported anti-trust violations. That day, a bipartisan group of a dozen politicians sent a letter to Maffei expressing “concerns with apparent anti-competitive actions” related to Liberty’s denial of Andretti during the potential expansion process. In asking for a quick response and answer to three pointed questions about its stonewalling of Andretti’s bid, the signees also said that “participation of all Formula 1 teams — including any American teams — should be based on merit and not just limited to protecting the lineup current of race teams.”

The initial letter, which went public May 1, was then followed by one penned by Jordan six days later that requested a trove of documents from F1 officials related to its decision to block Andretti’s bid for the grid, poked holes in its argument against Andretti’s admission and requested a “staff-level briefing” on the decision.

Andretti takes fight to Capitol Hill: US Congress members pen letter to Liberty Media

“Weak teams want to be protected from competition to the detriment of consumers and an additional team (that) would compete for prize money and sponsorships. If Formula One must hinder competition and harm consumers to protect failing competitors, then the entire Formula One model may be broken, and the entity cannot hide behind the necessity of a sports league to pursue anticompetitive conduct,” Jordan wrote.

“Delaying Andretti Cadilla’s entry into Formula One for even one year will harm American consumers to benefit failing Formula One teams.”

On May 21, a bipartisan group of seven US senators — including both from Indiana — published and sent a third related letter, this one sent to members of the Department of Justice and the Federal Trade Commission, to share concerns that Liberty and F1 were “acting at the behest of its independent teams and other key stakeholders…to exclude the team formed by (Andretti Global’s) partnership with General Motors from entering (F1).”

“It is possible that such a refusal to deal — especially if orchestrated through a gropu boycott — could violate US antitrust laws,” the letter read, going on to point out that F1 had run with 11 teams in 2016 and 12 in 2012 and that Andretti endeavored to be the only member on the grid with an American-made car, American-made components and an American driver. The letter also pushed back at F1’s claims that Andretti wouldn’t be competitive straight away, referring to Red Bull having won all but one race in 2024 and that half the grid went without a single win combined the previous four seasons.

Indiana senators back Andretti F1 fight: Todd Young, Mike Braun ask DOJ to investigate F1

Further, it noted the rise of American interest in the sport, adding that “clearly there is a financial incentive to adding an American team to F1’s roster, and there is no reason Team Andretti-Cadillac should be blocked unless FOM is trying to insulate its current partners from competition.”

“We have serious concerns that the rejection of Team Andretti-Cadillac was based on a desire to exclude a rival from the racetrack. marketing opportunities and prestige that competing in F1 can lend to a car manufacturer competing to sell cars across the globe,” the letter closed. “That F1 stakeholders may have engaged in concerted action to exclude Team Andretti-Cadillac — especially after it met all technical requirements to join F1 — that merits investigation.”

Andretti Global declined to comment on the news of the DOJ’s investigation of Liberty Media.

This article originally appeared on Indianapolis Star: US DOJ investigating Liberty Media for denying Andretti F1 bid