Williams team boss James Vowles believes that billion-dollar valuations assigned to several Formula 1 teams are not excessive relative to the worth of other high-profile sports franchises.
Over the decades, Formula 1 has evolved into a truly global sport with a massive and passionate fanbase. Races are held in various countries, attracting fans from all over the world, leading to increased viewership and market reach.
Grand Prix racing's sustained growth in recent years and its global appeal have logically benefitted its participants, with all teams now comfortably operating in the black.
This combination of factors has turned Formula 1 into a highly lucrative and sought-after business, which in turn has led to valuations of well over a billion dollars for the sport's top teams.
Williams Racing was acquired by US private equity firm Dorilton Capital in 2020 for $200 million, and it is estimated that the Grove-based outfit is now worth at least double that figure.
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But Vowles, who has been at the helm of Williams since the start of this year, believes that F1 teams' remarkable valuations still have headroom to grow.
“Here’s the interesting; is a billion-dollar team a lot? I wouldn’t say so," the Briton told Speedcafe.
"The cheapest NFL team, if you wanted to spend your money, would be four [billion], expensive six [billion].
"We’re not expensive for the sport that we are, and I think that the headroom is quite significant in front of us because we are, as a sport, growing significantly."
Formula 1's efforts to maintain competitive balance through regulations and cost control measures have made the sport more attractive to investors and sponsors.
But they have also led to a sustainable – and profitable – business model for the teams, which has fueled valuations.
"I don’t think at the moment you can over-capitalise," Vowles added. "You definitely can in time.
"If I was Mercedes, I’d be concerned about what else do you spend money on, it doesn’t make sense anymore, but their value will grow.
"And this is the mindset that isn’t fully understood in sport, but I think it will be.
"Mercedes grows not by investing another 100 million back into everything but by the sport growing as a whole, which means that it becomes closer competition, it becomes… you shouldn’t be able to guess who is going to win on Sunday. That’s how the sport grows."
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