McLaren Racing CEO Zak Brown sent a letter to FIA President Mohammed Ben Sulayem requesting formal restrictions on multi-team ownership structures, spotlighting a regulatory gap that has existed since Formula 1 introduced its $200 million anti-dilution entry fee in 2023. The sport currently operates without the cross-ownership prohibitions standard in American leagues, the Premier League, and MotoGP.
Brown's timing is deliberate. Formula 1 sold Andretti Global a grid slot last year for roughly $450 million in dilution payments to existing teams, then watched General Motors commit $1 billion to the Cadillac-badged entry launching in 2026. Those transactions happened under a governance framework that permits a single investor to hold stakes in multiple outfits, provided they disclose the position. No vote required. No structural firewall enforced. The FIA's sporting regulations address technical collaboration between teams but remain silent on capital tables.
The exposure is not theoretical. Lawrence Stroll owns Aston Martin F1 outright while maintaining a 23 percent stake in Aston Martin Lagonda, which supplies powertrain technical services to customer teams and previously explored acquisition talks with Williams Racing. MSP Sports Capital holds 33 percent of McLaren Racing and minority stakes in three other racing entities across series. Toto Wolff owns 33 percent of Mercedes-AMG Petronas, bought from Daimler in 2022, while Mercedes itself holds 33 percent and INEOS holds the remainder. None violate current rules because current rules do not exist.
Brown's letter arrives as private equity circles Formula 1's $3 billion average team valuation, up from $1.4 billion in 2021 when Liberty Media took the league public through its tracking stock. Silver Lake bought 24 percent of City Football Group in 2019, then took a stake in Fenway Sports Group in 2021, operating portfolios that span leagues with strict ownership barriers. Formula 1 has no such barrier, creating merger arbitrage scenarios that make compliance officers nervous. A hypothetical investor could own 15 percent of three midfield teams, influence driver market decisions, and coordinate garage data-sharing agreements that stay inside technical regulations while distorting competitive balance.
The FIA's governance structure complicates rulemaking. Formula One Management, the commercial entity Liberty Media controls, writes the Concorde Agreement that governs revenue distribution and team obligations through 2030. The FIA, a Paris-based nonprofit, writes sporting and technical regulations. Neither document currently restricts capital structure beyond requiring teams to operate as separate legal entities. Brown's letter goes to Ben Sulayem, not Liberty, because sporting rules fall under FIA jurisdiction, but any ownership restriction would require Concorde amendment, which needs seven of ten teams to approve. McLaren and Ferrari have historically pushed for tighter governance. Red Bull and Mercedes have opposed measures they view as constraining commercial flexibility.
The conflict surfaces in team valuation models. Andretti paid $450 million for eleventh-grid entry because the Concorde Agreement guarantees each team roughly $70 million in baseline prize money starting in 2026, even if they finish last. That math assumed ten independent operators splitting a $1.2 billion prize fund. If a single investor controlled three teams collecting $210 million combined in baseline payments, the effective dilution to other stakeholders changes. Sponsors pay different rates for entitlement deals when ownership concentration reduces true competitive variance. Aramco's $450 million Aston Martin deal in 2024 priced in the assumption that Aston Martin's strategic decisions were made in Silverstone, not coordinated in a fund manager's portfolio review.
Brown's letter does not propose specific language, but comparable leagues offer templates. The NFL prohibits ownership stakes above five percent in multiple teams. The Premier League caps cross-ownership at ten percent passive investment with no board seats. MotoGP bans it outright after Dorna Sports, the commercial rights holder, unwound a brief period in the 2000s when tobacco sponsors effectively controlled three teams through subsidiary structures. Formula 1 has more fragmented governance, but the FIA could impose a rule requiring teams to certify that no investor holds more than ten percent in another outfit, with annual disclosures and breach penalties including point deductions.
The pressure is reputational, not financial. Formula 1 just sold U.S. broadcast rights to ESPN for $255 million annually starting in 2025, triple the prior deal, based on a product that presents as ten gladiators, not three hedge funds. The Las Vegas Grand Prix generated $1.5 billion in economic impact in November 2024, anchored by the perception that Max Verstappen's Red Bull and Lewis Hamilton's Ferrari represent distinct competitive narratives. If ownership structures blur those lines, the storytelling asset that Liberty monetizes starts to erode.
Watch for FIA's response in the July World Motor Sport Council meeting in Paris, where sporting regulation amendments are typically debated. If the FIA tables the issue, McLaren has the option to force a Concorde vote by proposing an ownership amendment directly, though that path requires building a coalition that includes at least one of the sport's traditional power brokers. Brown's letter is public pressure designed to move the discussion before someone tests the loophole with a transaction that becomes difficult to unwind. The league sells $15 billion in team equity over a cycle. Eventually, someone will want to buy twice.
The takeaway
F1 has no multi-team ownership rules while selling franchises at $2B-plus, creating arbitrage risk that McLaren now wants closed before capital structures blur competitive lines.
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