F1 teams refusing eye-watering buyout offers of ‘almost billions’

Henry Valantine
Mercedes Lewis Hamilton on track at the Spanish Grand Prix. F1 Barcelona, June 2023.

The Spanish Grand Prix has been held at the Circuit de Barcelona-Catalunya since 1991.

F1 CEO Stefano Domenicali has claimed teams are knocking back buyout offers of “almost billions”, in stark contrast to recent history when a team could be sold for as little as £1.

The recent popularity boom for F1 has seen the sport’s fandom and demand for races go up in the past few years, with the introduction of the budget cap also bringing about the key element of financial stability for the teams.

As a result of all these factors and more combined, F1 teams are beginning to post healthy profits up and down the grid, and the sport’s chief executive has claimed that, due to the exclusivity of being on the current grid, the constructors are turning down extraordinarily high offers for investments or buyouts.

With the ‘Expressions of Interest’ and application process for prospective new F1 teams having recently closed for submissions to the FIA, talk has resurfaced about how many more teams could potentially be added to the grid in the future.

Currently, a $200m anti-dilution fee for new entrants is listed in the Concorde Agreement, signed by the teams, F1 and the FIA, to compensate for a loss of prize money – a valuation which Domenicali felt was “unreachable” when the deal was signed, given the previous state of teams which had left the sport.

But given the significant interest in joining Formula 1 moving forward, the sport’s figurehead has claimed the value of teams has grown so much that the current constructors are refusing offers that would have been unimaginable only a few years ago.

“I think that in my role, I need to consider the sport can grow only if the majority of all the teams can grow,” Domenicali told the Beyond the Grid podcast.

“That was one of the fundamentals of this budget cap to give credible financial stability to the value of the franchises of the team.

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“And the more you are able to have a competitive field, the more you may have interesting races, the more you can create the interest of the sport – and that’s for sure, very, very important.

“Therefore, it is important that we give the sustainable financial stability for each of them to make sure that everyone can do that.

“But if you look what has happened in such a short term, talking about the value of a team. At the time, I would say two years ago, when the new Concorde Agreement has been signed, when there was the talk about ‘what is the value of a team that has to come in Formula 1’, there was a number put on the Concorde Agreement, that was [$]200 million, which seemed unreachable, because there were teams in the past that were sold by £1.

“Now, the market is offering almost billions to teams, and they are refusing that. Can you imagine that?

“So that gives you the perspective of what we are building as an ecosystem. We are building important structure, important dynamics which, the more everyone is growing, the better and the stronger is the business platform which we are all working in.”