MercedesThe head of Formula 1 and co-owner, Toto Wolff, states there is “no reason” for the sport to stop expanding despite rising team values.
Wolff recently completed the sale of 15% of his holding company to George Kurtz, CEO of CrowdStrike., which indicates a 5% stake in the Mercedes team that Wolff co-owns alongside Mercedes-Benz and Ineos.
The agreement valued the Mercedes F1 team at a historic $6 billion – a significant return on investment for Wolff, who became a shareholder in 2013.
The assessment indicates that Mercedes, along with several competing teams, has now attained a comparable level of value to Europe’s top football clubs such as Manchester United, FC Barcelona, and Real Madrid.
The £6 billion figure is calculated by multiplying roughly seven times its highest 2024 revenue of £636 million ($858 million). This also highlights that F1’s budget cap, which has turned Mercedes-Benz Grand Prix Ltd into a profitable enterprise, is a major reason for its value increasing significantly in recent years.
“If someone had told us five years ago what the valuations would be, we wouldn’t have believed it,” Wolff said when asked whether his team’s rising market value surprised him.
But it’s a straightforward extension of the teams’ profitability. Due to the salary cap, our business model underwent a major transformation instead of simply spending more than each other regardless of the consequences. As [former F1 chairman] Chase [Carey] mentioned, he shielded us from our own tendencies. We managed to boost revenues and free cash flows, which resulted in these valuation multiples.
However, although F1 teams have become some of the most valuable European sports franchises, Wolff mentions that the $12 billion valuation of the Dallas Cowboys, an American football team, indicates that F1’s upper limit is still far from being reached.
“When you examine the US teams, five years ago the Dallas Cowboys were valued at $3 billion. Now they are worth $12 billion due to the changes in the fundamental factors,” he noted.
And that’s why I’m uncertain about where the future will take us. If we keep striving to comprehend what makes a sport enjoyable and entertaining, and to deliver an exceptional performance, there’s no reason the sport can’t keep growing as it is. The most crucial aspect is that we must take care of our sport in the correct manner.
Explaining the reasons for selling shares to Kurtz, whose CrowdStrike company is a key cybersecurity partner of the team, Wolff stated: “I have no intention of selling the team or leaving my position.”
I’m currently in a positive place and I’m appreciating it. As long as I believe I’m making a contribution and others also perceive that I am, there’s no need to consider things otherwise.
In my investment portfolio, I sold some shares to George, a racer and tech entrepreneur, who is someone who will assist us in utilizing the US market. That was the main reason, but there’s nothing more to it.
Read Also:
jasdooit 
Leave a comment