Formula 1 continues to present itself as a remarkably reliable investment opportunity within the sporting world, even though the premium motorsport series has not yet attained full value maturity. This perspective comes from a leading financial expert with deep experience in the sports sector.
Goldman Sachs Veteran Highlights F1's Investment Appeal
Elis Jones, the former head of global sports advisory at investment banking giant Goldman Sachs, has articulated a compelling case for Formula 1's financial future. Speaking at the Autosport Business Exchange London event on Wednesday, Jones emphasised that the series offers strong potential for returns over the medium to long term.
"When looking at it from an investment standpoint, can I make a return over five-to-seven years?" Jones posed. "And the answer has been 'very much so' for the last five-to-seven years, and from my perspective, 'very much so' over the next five-to-10 plus years."
A Sport Designed for Global Reach
Jones pointed to Formula 1's unique structural advantages, noting its consistent presence across multiple continents. "If you were designing a sport today that touched almost every continent in the world on a very regular basis, it would look like Formula 1," he stated, underscoring the series' inherent global appeal and commercial infrastructure.
Recent Team Valuation Surges Demonstrate Market Confidence
The investment landscape in Formula 1 has been transformed by significant ownership changes and stake sales across the grid, leading to skyrocketing team valuations in recent years.
- Audi's strategic moves: The German manufacturer announced a 75 per cent acquisition of the Sauber team two years ago, later completing a full buyout before selling a stake to the Qatar Investment Authority last year.
- McLaren's valuation milestone: The team's majority owner, Mumtalakat, acquired a series of minority stakes last autumn at a valuation reaching $4.5 billion.
- Aston Martin's lucrative deal: The British marque finalised an agreement with HPS Investment Partners and Accel, valuing its Formula 1 operation at more than £1.5 billion.
- Williams and Mercedes valuations: Williams raised capital in 2024, while a divestment by Mercedes F1 boss Toto Wolff of part of his one-third shareholding placed the team's value at over £3.5 billion.
The Impact of Financial Regulations and Scarcity Value
Jones highlighted the unintended positive consequences of Formula 1's cost cap, introduced several years ago at $150 million. "The inadvertent consequence of employing a cost cap... has meant that the sport under Liberty has seen a huge growth in popularity based on the macro trends," he explained. "And these teams now start to make money."
He contrasted this with other major sports leagues, noting that in European football, teams largely do not turn a profit. In the NFL, most teams are profitable but to varying degrees, while in the NBA, only about half of the franchises may be financially successful. "And most importantly, there's scarcity value," Jones added, referring to the limited number of teams on the Formula 1 grid, which enhances their investment allure.
The combination of financial regulation, global reach, and limited supply positions Formula 1 as a distinctive and promising asset class for investors seeking exposure to the sports industry, with further valuation growth anticipated in the coming years.
