Brown confirms $200m fee for new Formula 1 teams

McLaren CEO Zak Brown has confirmed teams wishing to join the Formula 1 grid would be required to pay a $200 million fee.

With the introduction of vastly changed aerodynamic regulations in 2022 and a budget cap, it is widely expected that interest will spike from new teams wishing to join the Formula 1 grid.

However, in a bid to protect the "franchise value" of existing teams, the $200m fee will be split between existing teams while also being used to prove entrants have the financial power required to compete in the category.

“I think that’s what that $200m is intended to do is to protect the value of existing teams," said Brown."

"As reported on the Williams sale, that’s [a takeover of an existing team] a lot less expensive and you get a lot more for your money than starting a new team.

“But I think if you believe in the franchise value growth of Formula 1, you’ll get that $200m back and then some."

Brown pointed to the failed bids of USF1 to join the grid as an example as to why the payment is a necessary evil, saying: “I think what we are trying to do as an industry is to stop what we’ve had in the past where a USF1 announces they are going Formula 1 racing and they never get to the track.

“I think the $200m is intended to really make sure that if someone is coming into the sport that they have the wherewithal to do it.

“We don’t have what we have historically which is random announcements that people are going to come in and then never make it to the track. You would never see that in other major forms of sport.”

He added: "The way the regulations are written is there is an ability for Liberty and the teams to agree to adjust that number."

Brown confirmed he is not aware of any new teams that are looking to join the grid in the short term, but feels the sport has taken the correct steps with the new Concorde Agreement to make the sport a more attractive proposition to investors.

“I do think that with the changes that Liberty and the FIA have introduced, Formula 1 is much more attractive to enter and to be competitive in and ultimately to create franchise value and to potentially make a little bit of value," said Brown.

“And I think, having a Formula 1 team that can be competitive, that isn’t a money pit, which is where Formula 1 has been, if you want to be competitive it’s a money pit and that’s not attractive, to now, and I think Formula 1 is set on a journey where, with a fairer revenue distribution, tighter rules, revenue distribution that there’s no reason why other racing team won’t start to look at Formula 1 and see that it’s a viable business model.

“So I do think we will see more teams but I think it’s a few years away.”

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