'Formula 1 teams are going to be worth billions'

F1 News

2 November 2021 at 14:57
Last update 2 November 2021 at 16:38
  • GPblog.com

The history of Formula 1 shows that teams come and go. Sometimes they are in the championship for a year or two and then change name or owner. Possibly this will change in the near future. The purchase of a Formula 1 team might only be possible for a small group of people.

Big surprise

Teams in the NBA or NFL sometimes change hands for many billions. The Race Asked CEO Zak Brown of McLaren if Formula One teams also represent such sums. “Yeah, I think Formula 1 teams can definitely be worth billions. There’s a lot of sports franchises, NFL, MLB, NHL, Premier League, NBA, etc, that are worth billions. If you look at the size and scale and importance of Formula 1, compared to these other leagues, you kind of scratch your head and go, why are some of these teams worth more than McLaren, Mercedes or Red Bull?"

How much F1 teams end up being worth is going to depend on the continued development of the sport by owner Liberty Media. “I think now that Liberty has come in and made the sport financially viable, financially sustainable, seeing rapid growth in countries wanting races – McLaren will be a profitable racing team in the not-too-distant future," Brown said.


Change has begun

Brown thinks the budget cap facing teams is very important. "Prior to the budget cap coming into place, I don’t think you could have said that because it was a sport where you had to spend as much as the biggest spender in the sport, so the franchise was more who can afford to lose the most. And that’s not a very attractive franchise model for a lot of people. So I think that fundamentally is changing. That’s why you’re seeing real sports investors like MSP and UBS [O’Connor, hedge fund] who invested in McLaren, who have a history in basketball, baseball so they have experience and success recognising when they think value creation is coming."