Wolff backs Brown's billion dollar vision for F1 teams

Mercedes team principal Toto Wolff has backed comments from McLaren Racing CEO Zak Brown that Formula 1 teams could change hands for over $1billion in the near future.

Ahead of the United States Grand Prix, Brown expressed a belief that "F1 teams can definitely be worth billions" after Liberty Media "made the sport financially viable".

Asked what this would mean for teams in 'real terms', Wolff explained: "In real terms, it means real numbers.

"NBA teams...or the NFL is something I understand better, the valuations are a sheer result of the revenue and bottom-line figures.

"You could say these teams are valued between five and six teams their revenue, or around 20 times EBITDA [Earnings Before Interest, Taxes, Depreciation, and Amortization].

"With the cost cap we are coming into a situation where there are real numbers and teams are going to be valued on the same kind of metrics, like other sports."

The budget cap introduced to F1 this year has been credited with making the sport sustainable with top teams unable now to throw unlimited quantities of money at a problem.

"If the franchise and revenue stream are sustainable long term, and Formula 1 is very attractive as a model because we sign sponsorship deals between three and 10 years and TV deals between five and 10 years, so as a business case itself is highly attractive because you can discount future cash flows easily," added Wolff.

"When we turn into profitably you can apply the same metrics as your peer group and that's where I agree with Zak, it's down to our own revenue and profits."

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