Cadillac forced to pay all 10 F1 rivals whopping £350MILLION with teams set to see prize money reduced in 2026.

Entering Formula 1

According to The Sun: CADILLAC must pay a hefty fee to join Formula 1 in 2026.

The American manufacturer, which is backed by General Motors and Andretti, will become the 11th constructor in Formula 1 starting next season.

Cadillac F1 - FIAGetty Reuters PA

After lengthy negotiations on Tuesday, the team announced its driver lineup for the season, opting for the tried-and-true pairing of Valtteri Bottas and Sergio Perez.

CADILLAC hopes that the experienced drivers will help them successfully launch their first season in Formula 1 and secure a respectable position.

Financial Aspects and Starting in Formula 1

Formula 1 teams receive prize money based on their results. The total prize pool is approximately 63% of F1's commercial revenue for each season, according to the terms of the latest Concorde Agreement signed in 2021.

In 2024, F1 owners, Liberty Media, distributed £1.266 billion among ten constructors.

This amount considers the results of teams over the past decade and special payments made to Ferrari for being the oldest participant in F1.

However, with the arrival of the 11th team, each existing team's share will decrease.

Under the current Concorde Agreement, new teams must pay an anti-dilution fee of approximately £150 million to compensate the existing teams for loss of income.

However, under the new Concorde that comes into effect in 2026, CADILLAC has agreed to pay a staggering anti-dilution fee of £358 million, reports BBC.

CADILLAC cars will run on Ferrari engines until 2028, after which the team will become a factory team, receiving engines made by General Motors.

Expert Comments

1997 Formula 1 World Champion and Sky Sports commentator Jacques Villeneuve believes the team missed an opportunity in their driver selection.

He expressed that the team should have chosen four-time IndyCar champion Alex Palou.

“They (Bottas and Perez) have vast experience, but is that experience the right one? That's what we need to find out,” said Villeneuve.

According to Villeneuve, while Bottas and Perez are capable of winning, developing the car is a completely different task, and there’s no guarantee they can handle that.

This Sunday, Formula 1 returns with the Dutch Grand Prix after the summer break.

Alamy Formula 1 undoubtedly attracts fans from around the world. Cadillac's entry could become a landmark event for American automotive industry and signify the growing popularity of racing in the USA. The team aims to be competitive and deliver quality performances, but whether they can withstand the pressure at a new level remains to be seen.