Are F1 teams a good business? Yes, for some of them…

The Acquired podcast investigates the significant financial transformation of Formula 1 teams, revealing how organizations that historically operated at a loss have evolved into highly profitable enterprises. This episode specifically analyzes the revenue generation and cost control mechanisms that have driven this economic shift within motorsport, particularly for the sport's most prominent teams.

The discussion highlights impressive revenue figures for leading F1 teams, with Mercedes generating $800 million, Ferrari $670 million, and McLaren in the range of $650 to $700 million. Red Bull Racing also demonstrates strong financial performance, reaching $420 million in revenue. The average revenue per team in 2026 is projected to be around $430 million, showcasing a robust financial landscape for the sport.

A key factor enabling this profitability is the stringent cost cap, set at $170 million. When combined with substantial revenue streams, even after accounting for driver salaries and marketing expenses, teams can quickly achieve break-even or profitable status. This structure allows top teams to maintain high expenditures in crucial areas while ensuring overall financial viability.

This current profitability marks a dramatic departure from the past; just 15 years ago, major teams like Mercedes, Ferrari, McLaren, and Red Bull Racing were all operating at a loss. The episode underscores how strategic changes in the sport's financial regulations and commercial growth have completely reshaped the business model of F1 teams.

Listeners will gain a clear understanding of the economics behind modern Formula 1, appreciating how a sport once characterized by significant financial outlays and losses has become a lucrative venture for its participants, driven by high revenues and disciplined cost management.