Toto Wolff: All Formula 1 teams could be 'on the verge' of being profitable

Toto Wolff said he thinks all 10 Formula 1 teams could be “on the verge” of turning a profit, and hopes that will become the case soon.

With expenditure in the sport decreasing and teams adjusting their structures accordingly, the Mercedes boss thinks that the whole grid could be in a position to begin making money as organisations in the near future.

Wolff credits F1 CEO Stefano Domenicali and sport owners Liberty Media for their work in bringing the finances of the sport under control, and believes the business model now in place in the sport makes it a positive environment in which teams can succeed.

“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,” Wolff told The Race when asked about Formula 1’s financial situation.

“Stefano, 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].

“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.”

Explaining his reasoning behind this thought process, Wolff attributes the improvement down to the fact the days of free spending in Formula 1 are over, meaning there is a target to work towards which, when countered with sponsorship and television income, provides a basis to be able to make more money as an organisation.

With that, the Austrian added that he does not intend on giving up his share in the Mercedes team any time soon, given the money-making potential it now has.

“You know what your costs are,” said Wolff. “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.”

 

 

 

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