Mercedes team boss Toto Wolff thinks all Formula 1 teams and “on the verge” of becoming profitable, in part due to F1’s cost cutting measures.
The constantly rising costs of competing in Formula 1 have been a subject of debate for years. Not only was it making it difficult for some teams to be competitive, it also turned some of the manufacturers away from the sport.
With the introduction of the budget cap, that limits how much a team can spend in a single season, that is beginning to change.
“We are in a very good moment in time for Formula 1 because the audiences are growing, the popularity of the sport has been increasing, we are slowly but surely tapping the Americas,” Toto Wolff told the Race.
“Stefano [Domenicali, F1’s CEO], with Liberty, have been doing a tremendous job. I can only speak for ourselves, we have grown our top line considerably. The cost cap has brought us a bottom line and that is how sports teams should be.
“It shouldn’t be a marketing exercise only and a cost centre. It should be a profit centre similar to what the American teams are [in other sports].
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“We are clearly there and I believe, or I would very much hope, that all the teams become profitable very soon and I think it is on the verge.”
Wolff highlights why it’s now easier for new teams to make a decision to enter Formula 1, and why it is the wrong time to sell a team.
“You know what your costs are. You can’t spend more than $145million this year and [the budget cap is] going down.
“Formula 1 in itself is so successful that based on the EBIT [Earnings Before Interest and Taxes] that is being distributed to the team, a large chunk of that is covered by TV only, so it’s a very predictable exercise.
“Whoever buys a Formula 1 team today knows exactly to the dot what they need to spend in order to be competitive, because we wouldn’t be able to spend more, so that’s why it has become a very good business opportunity on my side.
“I wouldn’t sell a team. On the contrary, with INEOS coming in I bought an additional 3% and I’m very happy about that,” concluded the Austrian.