Formula One (F1), the pinnacle of motorsport, is experiencing a significant shift in its financial landscape, marked by soaring valuations and notable investments. The latest data compiled by Sportico reveals the staggering worth of the 10 F1 teams, totaling $15.3 billion. At the forefront is Ferrari, commanding a valuation of $3.13 billion, while the Haas F1 Team lags behind at $710 million.
Methodology and Revenue Streams
To ascertain the enterprise value of the F1 teams, Sportico meticulously calculated each team’s revenue, drawing on publicly available financial statements, regulatory filings, and expert interviews. Sponsorships and prize money distributions form the main revenue streams for teams, with sponsorship deals ranging from low six-figures to multimillion-dollar contracts. Aston Martin, for instance, has witnessed a remarkable 1,000% increase in sponsorship revenue since Lawrence Stroll’s acquisition in 2018, set to surpass $220 million this year.
Formula One Revenue Model
Formula One generates revenue through various avenues such as race promotion fees, media rights, sponsorship fees, and ancillary sources like ticket sales and international logistics. As per the Concorde Agreement, a contract governing the sport, 45% of this revenue is distributed among the teams. In 2022, the teams collectively received a total prize money payment of $1.16 billion, accounting for their previous year’s performance and the sport’s current-year revenue. Notably, Ferrari enjoys substantial additional bonuses due to its historical standing in the sport.
Diversified Revenue Streams
Teams also generate additional revenue through licensing, merchandise sales, and related businesses. For example, Mercedes leverages its engineering expertise through its Applied Sciences division, catering to clients like the INEOS Britannia sailing team participating in the America’s Cup competition.
Valuations and Investor Interest
The recent $900 million valuation of the Alpine team, formerly owned by Renault, exemplifies the robust financial health of F1. Hollywood actors Ryan Reynolds, Rob McElhenney, and Michael B. Jordan have not only made headlines with their investment but also underscored the serious business prospects F1 offers. The consortium involved in the Alpine deal includes RedBird Capital Partners, known for its investments in the sporting industry, emphasizing the potential for solid returns.
F1’s Popularity Surge in the US
The American-led consortium’s interest in F1 reflects the changing perception of the sport in the United States. The popularity of F1 has grown exponentially, evidenced by the three Grands Prix scheduled in the US this year. The success of the Netflix series “Drive To Survive” and a renewed broadcasting deal with ESPN further fuel this upward trajectory. The heightened interest has also prompted expressions of interest from potential new teams, with Andretti racing and Hitech eyeing entry into F1 by respectively 2025 and 2026.