FIA President Mohammed Ben Sulayem confirmed the governing body has opened a formal review of multi-team ownership structures after McLaren CEO Zak Brown submitted a letter urging rule changes to prevent common ownership across Formula 1 teams. The review follows market reports linking Mercedes to a minority stake in another grid entry, a structure Brown argues creates competitive conflicts the sport cannot afford.
Brown's letter—delivered directly to Ben Sulayem—calls for explicit prohibition of shared ownership arrangements between teams. The timing matters: grid valuations now exceed $15 billion in aggregate, private equity continues circling the paddock, and the sport's commercial appeal under Liberty Media has made team stakes increasingly liquid. McLaren itself sold a minority position to MSP Sports Capital in 2020 for a reported $240 million, establishing a valuation benchmark other teams have since used in financing conversations. Brown knows the asset class; his concern is operational overlap.
The governance question splits into two threads. First, whether common ownership dilutes competitive integrity—the argument Brown advances, rooted in potential information flow and strategic misalignment between sister entries. Second, whether prohibition limits capital formation in a series where teams outside the top three still operate on constrained budgets despite the $135 million cost cap introduced in 2021. Haas, Williams, and Sauber each face different funding challenges; minority stakes from larger organizations could stabilize operations without triggering anti-competitive dynamics if structured correctly. Ben Sulayem's public division on the issue signals the FIA has not reached internal consensus.
The Mercedes link remains unconfirmed but fits observable patterns. Toto Wolff runs the most commercially sophisticated team operation in the paddock, with revenue exceeding $450 million annually before prize money. A minority position in a smaller team would offer strategic optionality—junior driver placement, powertrain customer leverage, technology transfer pathways—without full consolidation risk. The FIA's current rules do not explicitly prohibit such arrangements, a gap Brown's letter seeks to close before capital moves.
What matters for team operators and allocators: this review sets precedent for how F1 treats ownership structures as franchise values climb. The NFL prohibits cross-ownership with other major sports properties; English Premier League rules limit multi-club stakes within the same league. Formula 1 has no such guardrails, making it more permissive than peer leagues despite operating a tighter competitive format where tenth-place finishes carry $10+ million swing value in constructors' standings. If the FIA moves toward prohibition, it narrows exit options for current stakeholders and complicates entry strategies for new capital. If it permits multi-team stakes with disclosure requirements, expect immediate activity from teams seeking liquidity without selling control.
The review timeline remains unspecified, but three forcing functions accelerate decision-making. Audi enters the grid in 2026, resetting paddock dynamics and likely prompting other OEMs to evaluate entry or investment. The Concorde Agreement governing commercial terms runs through 2025, with renegotiation beginning late this year—ownership rules belong in that conversation. And Liberty Media continues discussing a potential F1 spinoff, a structure that would bring additional governance scrutiny from public-market regulators who dislike ambiguous conflict-of-interest frameworks.
Brown sits on the F1 Commission, giving him procedural leverage beyond the letter itself. His public opposition makes any near-term multi-team deal politically costly for the FIA to approve, even if technically permissible under current statutes. The review becomes McLaren's veto by another name unless Ben Sulayem builds coalition support for a different framework. Worth noting: Brown opposed the Andretti entry bid on grid dilution grounds, a position that drew criticism from U.S. congressional members. His consistency on ownership concentration suggests principle rather than opportunism, but paddock memory is long.
The immediate impact: any team exploring minority sales now factors regulatory uncertainty into valuation models. A 20% stake that seems attractive at $300 million becomes harder to price if ownership rules might change before close. Advisors at Raine Group and LionTree—both active in sports M&A—will be telling clients to accelerate timelines or wait for clarity, depending on leverage position. The slower path favors incumbents; the faster path favors capital.
Ben Sulayem's divided posture tells you the lobbying has already begun. Teams with strong balance sheets want prohibition to protect competitive moats. Teams needing liquidity want permissive rules to access non-dilutive capital. The FIA answers to both, plus Liberty Media, plus the manufacturers who supply engines, plus the promoters who pay hosting fees. Governance by committee rarely moves quickly, but Brown's letter makes delay its own decision—one that favors the status quo McLaren prefers.
The technical question is whether F1 treats teams as franchises or contractors. Franchises carry ownership restrictions to preserve league competitive balance; contractors operate as independent businesses within common commercial terms. F1 has drifted toward franchise economics—capped costs, fixed revenue shares, regulated technical specs—without adopting franchise governance. Brown's letter forces the contradiction into the open. The FIA's answer will determine whether the grid consolidates or fragments over the next commercial cycle.
Next procedural step: F1 Commission meeting, likely before the summer break. Ben Sulayem chairs but does not control the vote. Brown attends as McLaren's representative. Mercedes, Ferrari, and Red Bull send their own executives, each carrying different ownership exposure and different capital strategies. The teams collectively hold veto power over governance changes under Concorde terms, meaning this review ends either in consensus or stalemate. Stalemate leaves the current gap open, which is effectively Brown's win.
The review formalizes what was already happening informally—teams testing ownership boundaries, the FIA reacting case-by-case, and capital circling with increasing specificity. Brown's letter converts private conversations into public process, a move that typically signals someone is preparing to act and wants rules clarified first. Whether that someone is McLaren exploring a sale, Mercedes planning a stake purchase, or another party entirely will become clear once the FIA publishes its review framework. Until then, expect paddock legal teams to stay busy and minority-stake term sheets to include regulatory-change contingencies.