As the gap between top teams such as Mercedes, and Red Bull kept increasing with the rest of the grid, Formula 1 introduced a budget cap to bring a level playing field into the equation. However, instead of making the field equal, it increased the overall valuation of the F1 teams. So much so that their valuation increased from $1 billion to $20 billion, making it an increase of about $19,000,000,000, as per Business F1.
The FIA introduced the cost cap in 2021 to bring the teams closer. However, the cap does not stay the same, but decreases by $5 million every year. When it started, the cap was at $145,000,000 and now in 2023, the cost cap is at $135,000,000.
As the cost cap came in place, the top three teams had to make the biggest adjustments and therefore faced the most troubles. They had to trim down their team and allocate their crew to non-F1 projects to remove their salaries from the equation.
Cost cap helped F1 teams make more money
The main aim of the cost cap was to bring all ten teams closer. But in reality, they are still as far apart as they were a few years ago. Red Bull, Mercedes, and Ferrari look to be miles in front of the likes of Williams, Haas, or AlphaTauri.
However, the presence of the cost cap increased the values of the teams individually as well as collectively in the last five years. According to the August edition of Business F1, the valuation increased to a staggering $19 billion.
Instead of making F1 more equal, it led to the top teams like Red Bull, Mercedes and Ferrari reach a valuation that exceeds $2 billion.
Formula 1 teams and their individual valuation as of 2023
According to reports, the estimated valuation of each team is $2 billion now, and individually Ferrari leads the way. As per Business F1 estimate, the prancing horses are valued at $7.5 billion, while the Silver Arrows and the Bulls have a $2.75 billion valuation.
The list follows with McLaren, Aston Martin, and Alpine each having $1.3 billion, $1.25 billion, and $925 million valuation respectively. However, there were significant criticisms from other teams after Alpine’s net worth increased with the Ryan Reynolds-led consortium’s investment.
These teams are followed by Haas, Williams, and AlphaTauri with $900 million each. While Ferrari has the highest valuation, Alfa Romeo has the least estimated valuation of around $875 million. All in all, with Netflix’s Drive to Survive and Social Media’s boom, F1 has reached a very comfortable position financially.
