Over the past few days I’ve been asked many times and seen people enquiring on various F1 websites as to how much is an F1 team worth. Of course the answer is simple, different teams are worth vastly different amounts. An F1 team is a business venture – registered with a legal identity independent of any rich owner and subject to the business regulations from the statutory authority where they are registered.
Valuing a business
The way business ventures are valued is highly complex and sector/performance specific. There was old 3 times profit rule that was a fundamental when I studied Finance many years ago. Yet even this most simplistic valuation methodology is fraught with danger when you dig deeper. Is that profit before or after asset depreciation, asset goodwill, taxation, one off accounting entries of substance – I could go on..and on..and on…
I guess my favourite methodology which can be proved beyond doubt and its an old adage, which says “The value of something is best measured by how much someone is actually prepared to.”
