Toto Wolff, the CEO and team principal of Mercedes-Petronas, has experienced a remarkable surge in his net worth this year, despite his team’s current performance in Formula 1.
The Mercedes Formula One business empire may be struggling at the moment – the team is a distant second in the constructors’ championship – but CEO and team principal Toto Wolff is still raking in the dough.
Rags to riches
Toto Wolff’s journey in motorsport began in the Austrian Formula Ford Championship and the German Formula Ford Series, where he showcased some talent as a driver.
He achieved success in the 1994 24 Hours Nürburgring, winning his category. Wolff went on to compete in prestigious championships such as the FIA GT Championship and Italian GT Championship, in an attempt to further establish himself in the racing world with limited success. His tall stature at 6 foot 5 inches did limit his single-seater career somewhat.
Alongside his racing endeavours, Wolff ventured into the world of investments. In 1998, he founded Marchfifteen, focusing on strategic investments in internet and technology companies. In 2004, he established Marchsixteen Investments, continuing his investment ventures with a particular emphasis on medium-sized industrial and listed companies. Notable investments included Williams F1 and German HWA AG.
Formula 1 acquisitions
In 2009, Wolff made a significant move in the Formula One landscape by acquiring a share of the Williams Formula One Team. This marked his entry into team management as he joined the board of directors. His involvement with Williams F1 continued to grow, and in 2012, he assumed the role of executive director. During his tenure, the team achieved a memorable victory at the 2012 Spanish Grand Prix with driver Pastor Maldonado.
However, Wolff’s career trajectory took a new turn in January 2013 when he departed from Williams F1 to join the Mercedes AMG Petronas Formula One Team. Taking on the role of executive director, he also became a managing partner and acquired a 30% stake in Mercedes-Benz Grand Prix Ltd. The remaining ownership was divided, with 10% held by Niki Lauda and 60% by the parent company.
In his new position at Mercedes, Wolff assumed responsibility for coordinating all motorsport activities of the Mercedes-Benz brand, a role previously held by Norbert Haug. The strategic vision and management skills he brought to the team played a crucial role in their subsequent successes, especially when using the might of Mercedes Benz money in bringing in design talent and further growing the already large base in Brackley.
In 2014, Wolff sold the majority of his shares in Williams to American businessman Brad Hollinger. By March 2016, he had divested himself of his remaining shares in the Williams team.
Billionaire F1 boss: Wolff today
According to Forbes, Wolff’s estimated net worth has increased from $1 billion in March to a staggering $1.6 billion. This significant rise can be attributed to the increased valuation of the Mercedes F1 team, which is now estimated at $3.8 billion. Wolff, along with INEOS and Mercedes’ parent company, holds a 33% stake in the team.
In the previous valuation conducted by Forbes, shortly after Liberty Media’s acquisition of the series in 2017 for $4.7 billion, Mercedes was valued at just over $1 billion.
Liberty Media grows wealth of teams
Under the tenure of Liberty Media, Formula 1 has undergone substantial transformations. The average value of the ten F1 teams has soared to $1.88 billion, marking a remarkable 276% increase from 2019. Ferrari narrowly surpasses Mercedes, securing the top spot with a valuation of $3.9 billion. In contrast, the esteemed Williams team has the lowest valuation at $725 million.
The sport’s popularity has skyrocketed, especially in the United States, thanks to the immense success of Netflix’s Drive To Survive docuseries, which captivated viewers during the Covid-19 pandemic. F1 will further expand its presence in the US with the highly anticipated Las Vegas Grand Prix, joining existing races in Miami and Austin, Texas.
The implementation of spending restrictions by Formula 1 and the FIA has been a transformative factor. Under the “cost cap,” teams are limited to a budget of $135 million for equipment, engineering, and staffing in 2023, excluding driver salaries such as Lewis Hamilton’s estimated earnings of $55 million.
Mercedes forced to become more profitable by cost cap
These regulations have compelled big-budget teams like Mercedes, Ferrari, and Red Bull to adopt more efficient and judicious spending practices. For Mercedes’ F1 team, it has resulted in a highly profitable business model. Forbes projects the team to generate revenues of $700 million, with an operating income of $192 million in 2023.
Wolff believes that F1’s income streams are relatively predictable, making it an attractive and resilient venture. He emphasizes the importance of delivering an exceptional show, collaborating with Liberty in designing a captivating spectacle. As a result, F1 continues to outpace other industries.
“Our business is pretty predictable on the income streams,” Wolff told Forbes in May.
“It’s a really good value proposition, and I generally believe that non-scripted content sports are crisis resilient, and if we do a good job in promoting it and providing a good show, which we are part of designing together with Liberty, we are continuing to outgrow other industries.”
— James 🇬🇧🏁 (@James_UK7) July 17, 2023
Wolff: “I’d give up the profit to win again”
Wolff’s passion for motorsports has been a lifelong pursuit. While his racing career was cut short due to his height of 6 feet 5 inches, he channeled his drive into successful investment ventures and managing junior drivers. Joining Williams Racing in 2009 as an investor and later as executive director, Wolff made a pivotal move to Mercedes in 2013, acquiring an initial 30% stake for an estimated $50 million. Under his leadership, Mercedes has clinched eight constructors’ championships, seven driver titles, and an impressive 115 Grand Prix victories.
For Wolff, financial success is secondary to his unwavering desire for victory, or so he claims. He unequivocally states, “I would give up every single penny of the profits to win.”