McLaren Chief Executive Officer Zak Brown claims that all 10 teams on the 2024 Formula 1 grid are “well north” of a £1 billion valuation.
Brown gave this and other insights regarding how Formula 1 owners Liberty Media have helped transport the financial aspects of the sport.
Having acquired the sport ahead of the 2017 season, Liberty has looked to adopt a franchise model, popularised in American professional sports leagues such as the NFL and NBA, in Formula 1.
This has seen a fairer sharing of prize money and broadcast profits across the 10 teams and with the help of cost-cap regulations, put the grid on a sure financial footing.
“Half the grid is profitable,” said Brown at a Bloomberg event in Jeddah.
“They weren’t five years ago,” he added.
Brown’s assessment of the £1 billion-plus value of each of F1’s 10 teams follows recent investment into the likes of Alpine and Aston Martin.
An investment group featuring Hollywood’s Ryan Reynolds and Rob McElhenney, plus sports stars Anthony Joshua, Patrick Mahomes and Travis Kelce purchased a 24% stake in the anglo-french Alpine outfit last year for €200 million (£171m), putting the team’s value at the time at an approximate €800m.
Meanwhile, Aston Martin sold a minority stake to private equity group Arctos Partners that reportedly set the team’s value to £1 billion.
It’s no surprise then that prospective F1 outfits want a slice of the profitable pie that Liberty Media has helped cultivate.
Last saw Andretti put forth as a prospective 11th team following an FIA-led tender process.
However, the current 10 teams on the grid, who weathered the storm of financial hardship through the Covid Pandemic to come out on the other side in a positive situation, were wary of sharing the piggy bank to an 11th squad.
Formula One Management (FOM) and by extension, Liberty, held a similar view and Andretti’s bid to join F1 was unsuccessful with FOM citing amongst other reasons that the team didn’t bring enough value to the series.
“What Liberty is wanting to do is protect the value of the ten teams that exist,” said Brown.
“We’re now in a position where pre-Liberty you had teams falling away.
“Now [in the] post-Liberty era, there are teams lining up that want to get into the sport.
“So I think Liberty is just seeing how, when and if they want teams to enter.”
Another facet of Liberty-era F1 is the expansion of the calendar both in volume and into new territories.
The 2024 calendar is a record 24 rounds long after recent additions in Saudi Arabia, Qatar, Miami and Las Vegas, the latter two coming after a recent boom in popularity for F1 in the United States of America.
24 rounds and the fatigue associated with it for F1’s travelling professionals has been a key talking point, but with more regions looking to capitalise on F1’s recent success and willing to pay to be a part of the fun, some fear the calendar could grow even more.
F1 CEO Stefano Domenicali has suggested that 24 is the limit and even hinted at rotating European races on the calendar to make room for races in new markets, something that Brown has suggested in the past.
“If we needed to dial up a few more races, I’d say Asia is an important territory,” said Brown.
“If we had more markets to go into I’d say a race in Asia, India, South Africa.
“That would really give us a global footprint.”
