How Much Profit Does the Mercedes Formula 1 Team Make?

Toto Wolff says Mercedes Formula 1 generates around a billion dollars in revenue and a 30 percent profit margin, about 300 million of EBIT.

John Collison put the stake sale at a 4.6 billion dollar valuation, about 15 times that EBIT. Wolff says the multiples justified the price when he sold part of the team last year, and that the business could probably show about 30 percent more today, though he already has the partner he wanted. The team distributes dividends. He describes many American teams as living in a debt structure, while Mercedes does not. The team also skips heavy construction spending because it does not own a stadium, and it gives up some of the revenue a stadium would bring. He says Mercedes probably makes more profit than any sports team in the world other than the Dallas Cowboys. He will not value a business on revenue. He looks at return on investment, cash flow, and profit.