Scandal at Penske and Chaos at Red Bull

The Business of Motorsport this week has been dominated by scandal at Penske and chaos at Red Bull as both teams’ grapple with various controversies that threaten to derail their future racing plans. In addition to that I have news on a “revolutionary” proposal for the entry of new F1 teams, why one team boss is urging caution on WEC calendar expansion and why the US Congress is getting involved in the Andretti F1 bid.

All this and much more in a packed edition of the Business of Motorsport Roundup on Motorsport Prospects. Its business news racers can use.

Motorsport Industry News

Formula 1

Business of Motorsport

Red Bull Racing has confirmed the departure of their legendary Chief Technical Director Adrian Newey in 2025 as the team is enduring a chaotic 2024 in Formula 1 so far. The scandal surrounding the behavior of Red Bull Formula 1 boss Christian Horner has unleashed a wave of speculation over the future of driver Max Verstappen with the squad and now it has apparently cost them the services of the legendary Newey. Worst yet, it appears that Newey will be free to join another F1 team with Ferrari being the favourite bet as his destination.

In an interesting yet not surprising move, a dozen members of the United States Congress have written to Liberty Media demanding to know why Formula 1 has blocked Andretti-GM’s entry and raised questions over its antitrust legality.

“In the letter, which is addressed to Liberty boss Greg Maffei, the Congress members “write to express our concerns with apparent anti-competitive actions that could prevent two American companies, Andretti Global and General Motors (GM), from producing and competing in Formula 1.””

See the Motorsport Legal Roundup below for the specifics of what they are demanding.

In more Andretti Global news, BlackBook Motorsport explains why General Motors chose Andretti for its F1 entry bid.

“General Motors has always looked for the best platforms to compete and win,” Lencheski tells BlackBook Motorsport. “Everyone in the GM Racing ecosystem understands the business and the ‘game’ of the business. They are amongst the smartest, most capable executives in the racing business, full stop.

“GM has competed, won and, in some cases, dominated in every global series it has chosen to participate in and, if they choose Formula One, the entire paddock will be lifted up across every business segment.

“I have seen it before, especially with Le Mans. We will see it again if Formula One teams are savvy enough to see five to ten years ahead when the US market has matured.

“In my experience, the men and women of General Motors and General Motors Racing do not come to receive participation trophies.”

Why General Motors chose Andretti for its F1 entry bid

Somewhat related to the above, Racing News365 has revealed that Formula 1 and the FIA have been issued with a remarkable proposal designed to get a new team onto the grid which would have no effect on the prize pot for the current teams.

In the document submitted to F1 and the FIA, and seen by RacingNews365, the broad scope of the proposal would allow for up to three new teams to be permitted to join the grid, but crucially, not as constructors, and operating its headquarters in a region not currently represented by an F1 team, namely the Americas, Asia, and Africa/Oceania.

As a non-constructor, each team would not collect constructors’ championships points nor be eligible for prize money; compete in a proposed minimum of eight races at circuits where 26 cars can be accommodated, and compete in an additional proposed minimum of six races to specifically foster development within their home market.

Exclusive: F1 and FIA offered revolutionary new team proposal

Reports are circulating that Lawrence Stroll is involved in initial discussions regarding him selling a minor stake of up to 25% in the Aston Martin Formula 1 team. According to BlackBook Motorsport, “Where this further investment will come from remains to be seen, but the existing relationship with PIF could provide a very easy path to additional capital. After all, state-owned Aramco is the team’s title sponsor until 2028.”

Front Office Sports explains how F1 remains hot with a $10B offer and dozens of interested new race hosts.

“Meanwhile, F1 CEO Stefano Domenicali said that, despite the sport already reaching its maximum of 24 races per year, more than 35 new venues have shown interest in hosting a race, with 11 being formidable contenders. “Seriously, the request is very, very big,” Domenicali told ESPN. Those markets might include U.S. cities Chicago and New York, as well as international destinations like South Korea, Thailand, China, South Africa, Rwanda, Malaysia, and India, per ESPN. Domenicali said not to expect a fourth race in the U.S., in addition to Miami, Austin, and Las Vegas.”

While hailing the importance of China to F1, series CEO Stefano Domenicali has stated that there are currently no plans for more than one race in the country. “I have to be honest with you, we already have 24 races, which is a big number because there is the demand. I don’t think it is possible to have two Chinese Grands Prix in the same championship.”

The dominance of Max Verstappen so far this year is a worrying trend for Liberty Media as it threatens to derail their growth plans for the sport, especially in the United States. But former Alpine team boss Otmar Szafnauer is urging that the series and its fans should be praising the driver for his crushing domination of F1 at present rather than criticised for making the sport boring.

“Now you have got the Netflix fans who are just learning and you don’t want to lose them. If Max is winning all the time, will you lose them? I don’t know the answer to that. But we have to celebrate Max for his brilliance and not chastise him for winning all the time.”

General Motorsport Industry News

Team Penske

The optics are not good. A preeminent race team with a legendary owner who just coincidentally owns the series it races in as well as its marquee event is caught cheating in a race (intentionally or not). Not only that but the scandal was uncovered a full 45 days after the race.

The problems for Roger Penske are mounting as fellow competitors are casting doubt on the explanations the team and series have given regarding how the IndyCar push-to pass system was enabled at both St. Petersburg and Long Beach (before it was discovered in a practice session) on the three Penske cars when it should not have been.

To make matters even worse, the three Penske drivers all reacted differently to the situation giving different explanations while Honda, who has made noises about leaving the series over the last few months have stated that the controversy has not been helpful in them deciding whether to stay or not.

There are still too many unanswered questions revolving around this saga to put this to bed just yet. The Indy 500 could not come at a better time for Penske and IndyCar as they look to weather the storm.

RACER has learned PREMA Racing, owned by Rene Roisin and managed by Angelina Ertsou and entering IndyCar in 2025, has made outreaches to multiple teams to inquire if they would be willing to sell their future charters to PREMA.

“I think there’s a window of change coming over the next few years in a positive way with what Roger [Penske] has done through Penske Entertainment, how they’ve stabilized the championship and how the championship’s grown. I can see a significant change in the level of IndyCar both off track and on track. And it’s my job to make sure that where we’re on the engine leaving the station, not trying to jump on the last carriage once it’s gone.”

NASCAR team owners “have been increasingly disillusioned” with the pace of negotiations to extend the sport’s system of “charters”, which are “licenses akin to major sports league franchises that guarantee entry into, and money from, all 38 of NASCAR’s premier Cup Series events,” according to Gluck & Bianchi of THE ATHLETIC. There are fewer than 250 days to strike a new deal, and sources said that “significant hurdles remain, despite the teams’ attempt to jumpstart the process in March 2022.”

Porsche Motorsport boss Thomas Laudenbach has urged the FIA World Endurance Championship to take a cautious approach towards calendar expansion amid talk of a potential ninth race being added for 2025 reports SportsCar365.

“It’s a question of budgets,” he said. “You always have to ask yourself how much additional benefit it brings with the budgets going up with transcontinental traveling. If we increase the marketing, the visibility, the fan base… we clearly have to work on that. This is not only the job of the promoter, but all of us together. Then I think you can increase the number of races. But for the moment I think we have to be careful. I don’t think that we should increase the number of races with this approach we have right now. I think it’s already tricky on the financial side, and I think we should be careful anyway. Don’t forget the GT teams, they are not all factory-backed.”

Motorsport Australia has released its 2023 financial results, which have taken a significant deficit. Operating across a January to December financial year, Motorsport Australia announced a net result of a $1,060,928 deficit.

“Inflation and rising insurance costs made for challenging operating conditions,” the Motorsport Australia media release stated. “While the Motorsport Australia balance sheet and cash reserves remain strong, the sport cannot continue indefinitely to absorb rising costs. The increasing costs of doing business, such as travel and supplier increases – which no business has been immune to in the past 12 months – have also impacted the sport, as competitors and promoters and other participants have experienced similarly.”

The Teams Racing Charter (TRC) could be in line for changes, with a committee of Supercars team owners formed to discuss the matter with RACE. Speedcafe understands that RACE has engaged with teams about potentially changing elements of the TRC.

Quick Takes on the Business of Motorsport This Week

Business of Motorsport

Motorsport Law Roundup

A look at some of the legal and regulatory issues and analysis in Motorsport this week

Andretti Global

As referenced above, these are the specific demands being made by the members of Congress regarding Liberty and FOM’s rejection of Andretti Global’s F1 bid. They demand a response by May 3rd.

1. “Under what authority does FOM proceed to reject admission of Andretti Global? What is the rationale for FOM’s rejection, especially with respect to Andretti Global and its partner GM, potentially being the first American-owned and America-built race team?
2. “The Sherman Antitrust Act of 1890 outlaws unreasonable restraints on market competition to produce the best outcome for the American consumer. How does FOM’s denial of Andretti Global and GM, American-owned companies, square with Sherman Act requirements, since the decision will benefit incumbent European racing teams and their foreign automobile manufacturing affiliates?
3. “We understand that GM intends to re-introduce its Cadillac brand into the European market, which would support thousands of good-paying American automotive jobs, especially with Formula 1’s worldwide audience and its halo effect on its teams and sponsors. How much did GM’s and Andretti’s entrance into racing competition taking a portion of the racing market share and GM’s entry into the European market taking market share each play into the decision to deny admission to the Andretti Global team, given the public outcry of incumbent Formula 1 teams against a new American competitor?”

Guenther Steiner is suing the Haas F1 team for breach of his employment contract after he was not retained for 2024.

“Haas F1’s non-renewal of Mr Steiner’s Employment Agreement constitutes a “termination with cause” under the Employment Agreement, for which Mr Steiner is entitled to all “Base Salary and any other compensation that has been earned through the date of termination,” which includes commissions earned through December 31, 2023.” Steiner’s complaint states that did not happen.

Aston Martin has petitioned for a right of review regarding Fernando Alonso’s Formula 1 penalty at the Chinese Grand Prix according to Autosport.

“The team will now need to provide fresh evidence to the stewards for them to consider amending their ruling. A first hearing will be held on 3 May with Aston Martin’s and Ferrari’s team managers to determine whether the evidence put forward by the British outfit does warrant the stewards’ consideration.”

Legal Briefs

Motorsport Sponsorship & Partnership News

Here are the latest motorsport sponsorship deals, partnerships and related analysis that were announced this week

Rakuten
Business of Motorsport
Business of Motorsport
Business of Motorsport

Team & Manufacturer News

Here is a roundup of the latest team news from around the world of motorsport

Business of Motorsport
Business of Motorsport
Business of Motorsport

Motorsport Movers & Shakers

Business of Motorsport

Formula E has appointed Beth Paretta, a distinguished leader in motorsport, as the new Vice President of Sporting, effective 1 May 2024.

Beth Paretta, VP of Sporting, Formula E, said: “I am thrilled to join Formula E, a pioneer at the forefront of motorsport innovation and sustainability. This role presents an exciting opportunity to influence the future of electric racing and extend the series’ impact on global EV development and sustainable practices. I am particularly excited to continue my advocacy for gender diversity within the industry under Formula E’s progressive platform.”

RACER explains why Formula E is the perfect opportunity at the perfect time for Paretta.

Business of Motorsport

McLaren’s former group marketing director has described to Planet F1 how Zak Brown was pivotal in redefining the McLaren brand despite his statement “I’m just a sales schmuck.”

“He also had a really clear vision. He went aggressively after getting the right people to help him deliver that vision and then he backed those people 100 percent. He didn’t tinker, he was very clear about what he wanted, he was very demanding.”

Mark Boudreau
Author: Mark Boudreau

Mark is the publisher of Motorsport Prospects. As a former lawyer, he applies his legal background and research skills to assist race drivers by showcasing the resources they need to make their motorsport careers happen.

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