How Formula 1 Became Bigger Than Winning

Lawrence Stroll bought a struggling Formula 1 team in 2018 for under $100 million. He then spent an estimated $200 million on a purpose-built factory. The team he owns, Aston Martin F1, has never won a race and according to Sportico’s November 2025 valuations, it is currently worth $3 billion. That tells you exactly what Formula 1 has become.

Key Points: How F1 Commercial Value Now Outgrows Winning

• The average F1 team is now worth $3.42 billion, up 48% in one year, according to Sportico
• The 2021 cost cap capped spending but left commercial revenue entirely uncapped
• Ferrari generated over €800 million in commercial revenue in 2025
• That figure rose 22% despite Lewis Hamilton not taking a single podium all season
• Cadillac paid over $1.4 billion in fees and setup costs to join F1 before turning a wheel in competition
• Toto Wolff bought into Mercedes in 2013 at a team valuation of approximately $165 million. A partial stake sale in November 2025 valued the team at $6 billion
• The 10 teams on the 2025 grid were worth a combined $34.2 billion, according to Sportico

The Rule Change That Changed Everything

Before 2021, Formula 1 operated without a spending ceiling. Mercedes and Ferrari were spending hundreds of millions annually on car development. There was no floor on losses. No predictable cost structure. No model any rational institutional investor could underwrite with confidence.

For sponsors, the equation was equally uncomfortable. A brand could commit tens of millions to a team and watch that exposure disappear into the midfield if results collapsed. A CFO signing off on that kind of partnership had no reliable way to model the downside.

The Financial Regulations introduced in 2021 changed the sport overnight. The cap started at $145 million in 2021, reducing to $135 million by 2023 where it held through 2025. For 2026 it has been recalculated to $215 million, though as the FIA’s financial regulations chief confirmed, this is not a real spending increase but a recalculation that brings previously excluded costs inside the cap. The principle remains the same. Spending is defined, predictable and capped.

For the first time, teams had a defined cost structure. That changed everything. And as Motor Sport Magazine noted in its analysis of the Mercedes ownership restructure, the effect was immediate: teams that had previously ploughed all income back into performance could suddenly retain it as profit.

According to Sportico, six of the ten teams were profitable in 2024. That had never happened at scale before the cost cap era.

It didn’t stop at the team budget either. From 2023 the FIA introduced a separate power unit cost cap, but it is important to be precise about what this covered. It applied specifically to the development of the new 2026 power units, not the existing engines which were already homologated and frozen.

The FIA learned from the hybrid era where manufacturers spent billions on engine development with no financial ceiling, and they closed that door before the 2026 arms race could begin. That development cap sat at $95 million per year through 2025, rising to $130 million from 2026 when the new engines come into competition, according to FIA Power Unit Financial Regulations. For the first time, a new engine era arrived with a financial ceiling already in place before a wheel had turned.

The critical point is what the cost cap did not restrict. Commercial revenue. Sponsorship. Licensing. Media rights. Brand partnerships.

All of it remained entirely uncapped. The cost cap created a structure where costs have a ceiling and revenue has no ceiling at all. That is the investment case for modern Formula 1 in a single sentence.

The Numbers Behind The Transformation

According to Sportico’s November 2025 team valuations, the average F1 team is now worth $3.42 billion. That figure is up 48% in a single year and more than double the average recorded in 2023. The ten teams on the 2025 grid are worth a combined $34.2 billion. Only the NFL and NBA now have higher average team valuations among global sports properties, according to Sportico’s cross-sport analysis.

Then the individual numbers make it even clearer.

That is not competitive spread. That is franchise inflation across the entire grid.

Even Haas, the lowest-valued team on the grid, is worth $1.68 billion. As Sportico noted, that figure would have placed it fourth on the grid in terms of franchise value just two years ago.

Liberty Media’s own filings confirm the commercial trajectory of the sport itself. When Liberty acquired Formula 1 in 2017, total F1 revenue stood at approximately $1.8 billion. In 2025, Liberty reported $3.87 billion in F1 revenue. That is more than a doubling of the sport’s commercial base in eight years, driven by expanded media rights, new race hosting fees, sponsorship growth and a global audience that Liberty’s filings put at 827 million fans.

What The Investment Returns Actually Look Like

This is where the return becomes obvious.

Toto Wolff bought a 30% stake in Mercedes in 2013 when the team was valued at approximately $165 million, according to reporting from PlanetF1 and Motor Sport Magazine. In November 2025, a partial stake sale to CrowdStrike CEO George Kurtz implied a Mercedes valuation of $6 billion, as reported by ESPN and confirmed by Sportico. That is a 36-fold return in twelve years on an investment made while simultaneously running the team.

Lawrence Stroll’s Aston Martin story is arguably more instructive. Stroll paid under $100 million for Racing Point in 2018, then committed an estimated further $200 million to a purpose-built factory. The team has never won a race. According to Sportico, Aston Martin F1 is currently valued at $3 billion. The factory is still there. The results are not. The valuation does not appear to care.

McLaren provides the clearest before-and-after picture. According to Sportico, McLaren posted a $137 million operating loss on $166 million in revenue in 2018. Under Zak Brown’s commercial leadership, the team generated a $76 million operating profit on $700 million in revenue in 2024, according to the same report. Two consecutive constructors’ championships followed, and Sportico values the team at $4.73 billion, a 203% increase from 2023.

Who Actually Owns Formula 1’s Teams

Then look at who owns the grid. That tells the same story all over again.

Only two teams are majority owned by the manufacturer whose name appears on the car. Ferrari is publicly traded on the New York Stock Exchange. McLaren is owned by the Bahrain government. Williams was sold to American private equity. Alpine has NFL stars as shareholders alongside the Wrexham owners. Aston Martin also has private equity money and Saudi sovereign wealth fund rights in the background. This is not really a Cadillac team at all.

This is not a grid of car companies racing each other. It is one of the most diverse collections of global capital deployed in any sport on the planet.

Dorilton Capital’s co-founder said it plainly when they bought Williams in 2020 for $200 million: “We wouldn’t have invested if not for the cost cap. There’s just no way we could have caught up otherwise. What it did was it turned the sport into a business competition.” Williams is now worth $2.14 billion according to Sportico. That quote explains every ownership structure in the table above.

Cadillac: The Most Expensive Proof Of Concept In Sport

If the investment case for Formula 1 needed a single proof point, TWG Global provided it before their car had turned a competitive wheel.

To join the grid as the eleventh team in 2026, the team paid a $450 million anti-dilution fee, split equally among the existing ten teams at $45 million each, as confirmed in the Ninth Concorde Agreement and reported by both Sportico and Forbes. On top of that entry fee, approximately $1 billion went into building the operation. Total committed capital before racing: over $1.4 billion.

It is worth being precise about who actually owns this team. The Cadillac F1 team is not a General Motors works operation. It is owned and operated by TWG Motorsports, the motorsports division of TWG Global, a private American holding company run by co-chairs Mark Walter and Thomas Tull. Dan Towriss serves as CEO of TWG Motorsports. General Motors and Cadillac are commercial and branding partners, with GM on a path toward becoming an engine supplier later this decade. The team currently uses a Ferrari power unit.

TWG Global’s portfolio tells you everything about why they entered Formula 1. They have controlling interest in the Los Angeles Dodgers. They own Chelsea FC. They hold stakes in the Los Angeles Lakers. They own Andretti Global, competing in IndyCar and Formula E. They are not in the business of building cars. They are in the business of acquiring appreciating global sports franchises.

Formula 1, with its scarcity of eleven slots and its uncapped commercial upside, fits that model precisely. Formula 1 CEO Stefano Domenicali has explicitly and repeatedly stated that the sport has no room for a twelfth team. That scarcity is structural and deliberate. TWG Global paid over $1.4 billion for one of the most exclusive franchises on the planet. Not because they needed to race. Because the asset made sense.

The Lewis Hamilton Proof Point

Then there is Hamilton at Ferrari. And that might be the clearest proof of all.

Hamilton joined Ferrari from Mercedes ahead of 2025, uniting the sport’s most successful driver with its most successful team. His debut season was, by any sporting measure, a struggle.

He did not win a race. He did not finish on a Grand Prix podium across the entire 24-race season, becoming the first Ferrari driver in 44 years to go a full season without a rostrum appearance, according to reporting from Silverstone.co.uk. Ferrari finished fourth in the constructors’ championship.

Ferrari’s commercial performance told a completely different story.

According to Ferrari’s own financial results, as reported by GPFans, the team’s sponsorship, commercial and brand revenues hit over €800 million in 2025. That represented a 22% increase on the previous year. Ferrari’s media value generated for sponsors was 44% higher than any other team on the grid, and the team led all competitors in social media engagement by 31%, according to BNN Bloomberg’s team valuation analysis.

Hamilton brought sponsorship partners with him from Mercedes. His global reach across tens of millions of social media followers generated commercial interest that no on-track result was required to deliver. Ferrari’s financial results credited the commercial growth explicitly.

Zero podiums. Twenty-two percent revenue growth. In any other era, that would have sounded ridiculous.

Where Max Verstappen And Lewis Hamilton Fit Into This

Once you look at Formula 1 like this, driver value starts to look very different. In a sport where the cost cap controls spending and the revenue side has no ceiling, the most valuable asset a team can acquire is not a faster diffuser or a better wind tunnel programme.

It is a driver whose commercial reach exceeds the cost cap constraint.

There are realistically two drivers operating at that level right now. Lewis Hamilton and Max Verstappen.

Hamilton’s 2025 commercial impact at Ferrari is already documented above. Verstappen’s commercial profile is comparable and in some markets larger. According to SponsorUnited’s 2024-25 report cited by Sportico, total F1 team sponsorship revenue hit $2.05 billion in 2024. The average deal for an F1 team generated $6.22 million, more than eight times the average deal for an NFL team.

The right driver does not just attract sponsors. He changes what those sponsors will pay.

Charles Leclerc sits just below that top tier commercially, but you can see why he matters. He skews younger, fits the Ferrari brand naturally and still feels like he has room to grow. Hamilton and Verstappen are already fully formed commercial heavyweights. Leclerc still looks like an asset with upward movement.

Every team principal on the grid understands this calculation. Zak Brown has spoken publicly about Norris and Piastri representing the best driver pairing in the sport. He means it. He would also, if the opportunity arose, find a commercial and contractual structure that accommodated Verstappen. Not despite having two strong drivers. Because of what Verstappen does to everything that sits outside the cost cap.

Wolff has long liked optionality in the driver market. Short contracts on Russell and Antonelli. Kept himself liquid. In a Formula 1 shaped this heavily by franchise logic, that matters.

Coffee Corner Take

Formula 1 spent decades being a sport where you needed to win to matter commercially. Ferrari’s LST bonus, paid annually simply for being the only team to have competed in every championship season, is the last structural remnant of that era.

Everything else has changed.

The cost cap did not just level the competitive playing field. It transformed every seat on the grid into a commercially viable asset with a defined cost structure and an uncapped revenue ceiling. Haas, at the bottom of the valuation table, is worth $1.68 billion. The minimum entry price for a new team exceeded $1.4 billion.

Hamilton proved it in 2025 without a single podium. Verstappen has reinforced the same point at Red Bull for three years while still dominating on track.

Neither is motivated by commercial value alone. Both are generational competitors. Both want to win. That drive is the foundation of the commercial value, not separate from it.

What has changed is the calculation a team has to make to attract them. The right destination is no longer simply the fastest car. It is the team where competitive machinery and commercial platform align.

The sporting question and the commercial question are now inseparable.