Formula 1 Teams See Significant Increase in Value
The average value of Formula 1 teams has skyrocketed to $1.8 billion, marking a staggering 276% increase from $500 million in 2019, according to business publication Forbes. This remarkable rise in team valuations is largely due to the implementation of the $145 million cost cap in 2021. The cost cap was introduced to curb escalating spending by teams on developing faster cars, and it has had a significant effect on the financial terrain of Formula 1.
Before the cost cap, teams were spending upwards of $400 million annually, a figure that many struggled to recoup. Now, with the new regulations in place, teams earn around $600 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). With this structure, teams in the back of the grid need just $50 million in sponsorship income to cover the cost cap, a realistic goal given that they earn around 65% of their income from central funds and 35% from sponsorships.
F1’s Popularity Surge and Impact on Team Valuations
The increased value of Formula 1 teams has also been influenced by the growing global popularity of the sport, especially with the introduction of the 2022 regulations and the success of the “Drive to Survive” Netflix series. The expansion of Formula 1 into the United States, with three races in 2023—Miami, Austin, and Las Vegas—has also played a pivotal role in boosting the sport’s financial appeal.
Red Bull Racing’s Valuation
In 2023, Red Bull Racing is valued at $2.6 billion, making it the third most valuable Formula 1 team. This valuation places Red Bull just behind Mercedes, valued at $3.8 billion, and Ferrari, which leads with an impressive $3.9 billion. Red Bull’s valuation reflects the team’s sustained success on the track and its growing commercial influence globally, with key sponsorships and partnerships bolstering its financial standing.
Comparison of F1 Team Valuations
Here is a list of the most valuable Formula 1 teams in 2023:
- Ferrari: $3.9 billion
- Mercedes: $3.8 billion
- Red Bull Racing: $2.6 billion
- McLaren: $2.2 billion
- Alpine: $1.4 billion
- Aston Martin: $1.3 billion
- AlphaTauri: $1.1 billion
- Alfa Romeo: $900 million
- Haas: $780 million
- Williams: $725 million
Red Bull Racing’s $2.6 billion valuation highlights its position as one of the most successful and commercially viable teams in Formula 1.
