F1 News: American team facing HUGE financial demand to cover major 2026 loss

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F1 team facing HUGE financial demand to cover major loss

General Motors-Cadillac will make their debut on the grid in 2026

Kevin McKenna

Saturday 30 November 2024 11:57

A Formula 1 team are facing up to the prospect of having to part with hundreds of millions of pounds to help cover a significant loss.

It was announced this week that US car manufacturer General Motors has reached an agreement in principle with Formula 1 bosses to enter the sport in 2026 with its Cadillac brand.

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The application process is now moving forward, with the team set to become the 11th team on the grid, shortly after Andretti Global were denied entry over concerns about how much value they would bring to the sport.

GM/Cadillac are set to make their F1 debut in 2026

Andretti Global had previously been denied entry to become the 11th team on the grid

Rivals to receive compensation

A statement released by the team following last weekend's Las Vegas Grand Prix confirmed that the outfit will be named GM/Cadillac, with GM to supply its own engine at a later date.

But amid much speculation over how the new addition will impact the finances of the other 10 competitors, BBC Sport have reported that a sizeable 'anti-dilution fee' will be paid by GM and partner TWG Global to be split between their soon-to-be rivals.

The report read: "Senior sources in F1 have told BBC Sport that GM and TWG will pay an anti-dilution fee of $450m (£358m) to secure the entry.

Daniel Ricciardo and Valtteri Bottas are being mentioned as potential drivers for the new outfit

"This will be split between the existing 10 teams as compensation for their loss of prize money as a result of F1’s income now being split 11 ways rather than 10.

"The teams receive between them in the region of 63% of F1’s income.

"This is larger than the $200m anti-dilution dictated by the existing F1 rules, but the contracts between the teams, F1 and the FIA end after 2025 and are being renegotiated for 2026. The fee is expected to go up again in the new deals."

It remains to be seen which drivers the team will look to get on board ahead of their 2026 debut, with recently axed pair Daniel Ricciardo and Valtteri Bottas emerging as potential options following the announcement.