Cadillac Will Pay Each F1 Team A $45,000,000 Fee To Enter The Championship

American automaker Cadillac will join the Formula 1 grid for the first time in 2026, and it'll have to pay out the nose for the privilege. Parent company General Motors will provide a one-time entry fee of $450,000,000, split equally among the other ten teams on the grid, as an "anti-dilution" payment. Because each F1 team derives some of its annual income from a share of the sport's television revenue and prize money, and in 2026 that pot will be split among 11 teams instead of ten, Cadillac's payment will help diffuse some of that revenue loss in the first couple of years of the new team's participation. 

The Concorde Agreement, the commercial contract between Formula 1 and the teams running in the sport, has stipulated an anti-dilution payment from any team joining the grid. The existing agreement which runs the 2025 season specified a $200,000,000 anti-dilution fee. A new agreement was signed by all teams ahead of the 2025 Australian Grand Prix governing the 2026 season, which increased the fee to $450,000,000, though many of the teams started the negotiation with a desire to pump it up to $600,000,000. The most recent team to join F1 was Aston Martin in 2021, though it did not pay an anti-dilution fee because it purchased an existing team and did not expand the grid. Audi, which similarly purchased a stake in the Sauber team, is joining alongside Cadillac, but will not have to shell out the same fee. 

In addition to the money teams make from selling sponsorship Formula 1 pays out about 61 percent of its operating budget to teams, totaling around $1.3 billion in 2024. The basic way teams are paid is by points earned through the season. By winning the constructors' championship last year McLaren earned a payout of $132.9 million, while last placed team Sauber earned $57.9 million. There are additional bonuses paid out for "success" to previous championship winning teams Ferrari, McLaren, Mercedes, Red Bull, and Williams, and Ferrari famously receives a $63.3 million bonus for being a "historic" team. For a team like Ferrari, which reportedly took home a quarter of a billion dollars for its middling success in 2024, Cadillac's $45M won't be much of a game changer, but for Williams or Sauber it could mean a huge difference in team investment opportunities and choices. 

Ahead of the new Concorde Agreement signing, the series issued a statement saying that "Formula 1 has never been in a stronger position—and all stakeholders have seen positive benefits and significant growth."