Wolff calls $450 million entry fee for Cadillac F1 ‘too low’

Mercedes team principal Toto Wolff has expressed concerns about the financial implications of Cadillac’s potential entry into Formula 1.

Wolff believes that the proposed $450 million anti-dilution fee is insufficient to offset the losses existing teams would incur.

The figure, while staggering at first glance, pales in comparison to the revenues at stake, Wolff argued. But given the magnitude of the figure, the Austrian’s stance will certainly raise a few eyebrows.

“When you look at it in the first instance, we lose out,” Wolff said in an interview with Auto Motor und Sport. “We don’t know what Cadillac will invest in Formula 1.

“The compensation fee, which is currently set at $450 million, is too low. It does not make up for the direct loss in income.”

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The anti-dilution fee, introduced in the most recent Concorde Agreement, the all-important covenant that outlines the commercial terms that binds the teams to the sport, is designed to cushion the financial blow to existing teams when a new competitor joins the grid.

Initially set at $200 million in 2020, at a time when no new teams ambitioned to join F1, reports suggest the amount has more than doubled to $450 million for Cadillac’s proposed 2026 entry.

Waiting to See Cadillac's Impact

Despite this increase, Wolff remains skeptical about whether the amount adequately compensates the sport’s incumbents.

The rationale for the fee is straightforward: with an additional team on the grid, the prize money pool – currently split among 10 teams – would need to stretch further, potentially reducing the individual shares of existing competitors.

Wolff emphasized that the long-term financial impact depends on Cadillac’s ability to elevate the sport’s value.

“Only time will tell what value the sport gains from having an 11th participant,” added the Mercedes chief.

“If the sport’s value increases, then everyone benefits. But we just don’t know yet. No one has spoken to me about Cadillac’s exact plans.”

Wolff acknowledged that Cadillac’s entry could be a boon for Formula 1 under the right circumstances.

“If Cadillac enters now with a works team and invests an appropriate marketing budget into Formula 1, it will be a valuable addition to the sport,” he said.

Formula 1’s Financial Health

Despite his reservations, Wolff highlighted the remarkable financial stability Formula 1 has achieved in recent years.

“We [Mecedes] make a solid profit,” he stated. “Our profitability margin stands at 30 to 35 percent before tax. This even offsets our expenditures on the engine.

“The old cliché that Formula 1 is just a money pit is a thing of the past. In summary, Formula 1 has never been as financially healthy as it is today.”

For now, questions linger about the specifics of Cadillac’s investment in Formula 1 and the broader implications of an expanded grid.

While Wolff acknowledges the potential benefits of an 11th team, his comments underscore the high stakes involved in striking the right financial balance for all stakeholders.

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