- Mercedes estimated to generate highest 2023 revenue, US$700m
- Average F1 team revenue in 2023 estimated to be nearly US$600m
- Global media rights expected to be valued at US$1.4bn by 2029
- Las Vegas GP expected to generate US$500m from tickets and hospitality alone
The average value of a Formula One team has increased 276 per cent since 2019 to US$1.88 billion, according to a recent study by Forbes.
Headlining the team values, Ferrari and Mercedes are estimated to be worth US$3.9 billion and US$3.8 billion, respectively.
This is underlined by both teams’ estimated revenues for 2023 dwarfing the rest of the grid, with Mercedes expected to earn around US$20 million more than Ferrari at US$700 million.
Red Bull (US$2.6 billion) and McLaren (US$2.2 billion) are both valued at over US$2 billion, with estimated 2023 revenues of US$510 million and US$490 million, respectively.
Rounding out the teams estimated to be worth more than US$1 billion are Aston Martin (US$1.375 billion), Alpine (US$1.4 billion) and AlphaTauri (US$1.125 billion).
Towards the back of the grid, Alfa Romeo have an estimated valuation of US$900 million. While Haas (US$780 million) and Williams (US$725 million) might be the lowest on the list, they are still worth around three-quarters of US$1 billion.
A recent study by Sportico found Ferrari as the most valuable Formula One team, worth US$3.13 billion, highlighting the difficulty of correctly calculating the true value of a Formula One team.
A rapid ascent
It's hard to ignore the speed at which Formula One has grown, and the recent purchase agreement between Sauber and Audi is evidence of this.
In 2021, Sauber declined an offer from Andretti Autosport for a majority stake worth US$350 million. Just 15 months later, Audi invested US$650 million for a stake that will eventually grow to 75 per cent, almost doubling that initial offer.
Furthermore, Forbes reports that Red Bull turned down an offer for AlphaTauri worth more than US$1 billion, which would corroborate Michael Andretti’s recent comments on every team’s reluctance to sell.
Look at the recent Alpine deal: RedBird Capital Partners and Otro Capital purchased a 24 per cent stake in the team, valuing the French marque at US$900 million. The terms of that deal were locked in eight months ago, and Forbes believes the team can now fetch US$1.4 billion.
Back in 2018, average team revenue was estimated to be around US$220 million; today, only three teams are expected to generate less than that. Forbes' estimates for 2023 team revenue in Formula One is nearly US$600 million.
What’s more, teams are able to benefit from this increased revenue more than before thanks to the budget cap, set at US$135 million for 2023.
Formula One teams are now a profitable operation, a far cry from a history of teams spending beyond their means. The top teams in Formula One could easily more than US$400 million per season chasing that top step on the podium.
Now, teams at the back of the grid only need around US$50 million in sponsorship revenue to cover the cost cap thanks to the income they receive from Formula One’s central revenue.
Maximising sponsorship
Smaller teams make around 65 per cent of their income from this central fund and 35 per cent from sponsorship. For the big teams, it is more of a 60-40 split.
Crucially, due to the rapidly increasing value of the Formula One teams, most sponsorship deals are actually undervalued – especially with the big teams.
Red Bull signed a five-year, US$300 million deal with Oracle before the start of the 2022 season, while Petronas signed an extension with Mercedes last year to their US$75 million per year contract that kicks in from 2026.
The most recent deals were signed by smaller teams like Haas and Sauber. The former agreed a five-year, US$20 million per year deal with Moneygram and the latter will be sponsored by Stake on a three-year, AU$140 million (US$94.7 million) deal.
The expectation is that, once the majority of these deals come up for renewal, which will likely be around the 2024 or 2025 seasons, the money required to title sponsor a Formula One team will increase.
Viewership gains
The increased valuations of the teams is also reflected in global audience growth, with an average of 70 million people watching each race in 2022.
Thanks to this, global media rights are expected to top US$1 billion this year, reaching US$1.4 billion by 2029, according to a recent report by Seaport Research Partners.
In the US, Formula One’s main target market at the moment, viewership grew 36 per cent year-over-year to an average of 1.2 million per race in 2022.
Forbes reports that Disney-owned ESPN valued Formula One’s US media rights at around US$83 million per year between 2023 and 2025.
Overall revenue should also benefit from the increased involvement of Live Nation Entertainment, which Liberty Media owns a 31 per cent stake in.
Live Nation will be directly involved in the Las Vegas Grand Prix, which is expected to generate around US$500 million in ticketing and hospitality-related revenue alone.