Aston Martin F1 Targets NFL Franchise Valuations Amid Exponential Growth
Aston Martin's commercial director, Jefferson Slack, predicts the F1 team could eventually rival NFL franchises in value, highlighting F1's exponential financial growth. Bolstered by Liberty Media's strategic moves and a unique scarcity model, the team's valuation has soared, with expectations of further increases as it attracts major investors and expands fan engagement globally.
Aston Martin's commercial chief, Jefferson Slack, believes the Formula One team could eventually achieve valuations comparable to NFL franchises. This ambitious outlook comes as F1 team values surge, driven by strategic financial management and increased global appeal.
Why it matters:
Formula One's financial trajectory has been remarkable, transforming teams from potential money-losers into highly valuable assets. For Aston Martin, reaching NFL-level valuations signifies a massive leap in prestige and financial stability, reflecting the broader economic health and growing appeal of F1. This growth not only secures the team's future but also enhances its ability to invest in performance, attracting top talent and technology.
The details:
- Surging Valuations: Forbes recently valued Ferrari at an estimated US$6.5 billion, surpassing more than half of NFL teams and nearly all NBA franchises. Aston Martin's valuation reached US$3.2 billion, a significant increase from US$1.3 billion in November 2023.
- Comparison to US Sports: While Aston Martin's current valuation is below every NFL and NBA franchise, Slack sees no fundamental reason why F1 teams cannot close this gap.
- Revenue Multiples: Slack notes that F1 teams are currently valued at five to seven times revenue, whereas NBA teams command ten to twelve times revenue. He believes F1 multiples can grow to match those of established US sports leagues.
- Mercedes Benchmark: Mercedes' valuation, which already exceeds several NFL teams, is seen by Slack as an achievable target for Aston Martin.
- Liberty Media's Impact: Slack credits Liberty Media for creating a strong financial foundation for F1 through initiatives like the budget cap and the "Drive to Survive" Netflix series, which have made the sport more valuable and attractive to investors.
- Institutional Capital Influx: The increasing involvement of major financial institutions, such as Apollo and CVC, in sports further validates F1's growth potential and helps to scale valuations.
- Scarcity Model: F1's unique structure, lacking promotion or relegation, contributes to the high scarcity value of its teams, driving up valuations.
What's next:
Slack is confident that F1's growth, particularly in absolute terms, will continue, though the percentage growth might moderate as the base figures become larger. He emphasizes the importance of sustained fan engagement and avoiding arrogance to ensure long-term success. The influx of mainstream B2C companies like Pepsi and Disney into F1 sponsorship is expected to further promote the sport and create a virtuous cycle of growth. Macro-economic disruptions remain the primary perceived threat to this upward trajectory, but for now, the outlook for Aston Martin and F1's financial future remains incredibly bullish.