Toto Wolff
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Cheeky Pint · How Toto Wolff built the most valuable team in F1
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Why Does Toto Wolff Refuse to Sell Mercedes?
Toto Wolff says none of the owners wants to sell Mercedes shares, because they believe in the long-term path of the team and the sport.
A revenue multiple taken from a Lakers sale would price the team at 10 or 12 billion, and he says the business could be valued higher than a year ago. He treats the higher figure as paper. His horizon is long enough that chasing a bigger valuation through the ups and downs of the sport does not matter. He does not want a trophy investor who would maximize the price, and he wants the group seen as the serious people in the sport. He also thinks live sports stay resilient to the technology now arriving, because audiences want the drama and the glory of a huma
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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.
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Why Can an Owner Take a Longer Bet Than a Hired Boss?
Toto Wolff says an owner can make a call and keep the job, while a hired boss who skips the hierarchy can lose the job for the same decision.
He runs Mercedes like a 20-person organization. The decisions are quick, taken in the interest of the team, and still checked against the consequences for the brand. At Ferrari the team principal is one of 10 direct reports to the CEO, so a marketing person in the racing team can sit at the same level. Red Bull has an employed team principal reporting to a group of shareholders. Audi hires people from the car group and from Formula 1, on a salary and maybe a bonus. Wolff was handed a long leash, and he says there is no leash now because they are partn
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How Did Toto Wolff Buy Into the Mercedes Team?
Toto Wolff says Mercedes asked him to run the team because a corporate structure was not winning, then helped him buy a stake he could not afford on his own.
The company had bought the small team that won the championship in 2009, the first Mercedes Grand Prix squad with its own engines and its own chassis. It underperformed. Until 2013 it had won a single race. Wolff was running Williams with the founder, and Williams had won a race too. A board member asked how a private little team could win when Mercedes could not. Wolff looked at the numbers. Mercedes wanted world championships. He said one of them was wrong: he thought the budgets matched, and he was aiming at the top six. They said M
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Why Did the Formula 1 Cost Cap Shrink Long-term Research?
Toto Wolff says the Formula 1 cost cap, about 200 and a bit million dollars a year, shrinks long-term lab work because every engineering resource counts against the cap.
A team has to choose between compute for a front wing that might race in three months and research that might help a later car. He still wants a balance, weighing the lap time a future car could gain against what the current car needs. He does not claim that every speculative project had to vanish. Wind-tunnel runs and CFD simulations are limited too, so the research money cannot be spent exactly as the team wants. Before the cap, unlimited budgets built ultra-sophisticated cars and let Mercedes, Ferrari, and Red Bull leapf
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Why Does Mercedes Refuse a Genius Asshole?
Toto Wolff says an extraordinary scientist or engineer without humility, integrity, honesty, and enthusiasm has no future at Mercedes, and there is no place for a genius asshole.
A fan sees two drivers, a boss in front of a screen, and the mechanics and engineers on the pit wall. About 150 people go to the races, including marketing, and about 90 of them are the technical and operational crew. The works team is two and a half thousand people, with one UK hub for the engine and another for the chassis. Wolff uses a filter like the one he uses for drivers. There are not two superstars. There are two and a half thousand, and he treats them the same way. Mercedes took the pattern from the All B
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Can Toto Wolff Leave the Team and Still Own Mercedes?
Toto Wolff says a clean break is probably not possible if he and his family keep owning the team. An executive or non-executive chairmanship may happen, and it has to happen in a very precise way. A chairman cannot stay on the sidelines and interfere in daily business.
His job is going to be divided between two or three people he is vetting, people he believes are already doing a great job with their strengths in various areas. There will be a solid management structure, even though the setup will not be the same without the credibility he has as an entrepreneur leading his own businesses. He does not want a future where the family runs the team and the result is just mediocre. A person has
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Will the Madrid Circuit Add More Straights Next Year?
Toto Wolff thinks the Madrid circuit will change its layout next year to add more straights. The track is not permanent, and the design did not account for how hard the new generation of cars makes overtaking, even though a long banked corner looks spectacular for the drivers and for camera positions.
He loves old circuits as a traditionalist because they represent history. Layouts with vast areas, available because places were less developed, still provide great racing: overtaking, and cars able to run side by side. Criticism of the new Spanish track was that there was not a lot of overtaking. Madrid as a city is spectacular, the track built there is spectacular, and the job done over the
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Was Taking Williams Formula 1 Public a Success?
Toto Wolff says listing Williams was not a success. He is unsure a public listing would work even now, except maybe for an owner who only wants to raise capital or cash out, and he rejects a public company as the long-term structure for a sports team.
Williams reported to shareholders 20 times a year, once with each race. Mood swings from mania to depression within a week. Formula One was much smaller then, so the shareholder base would have been different. Outside shareholders would whipsaw the team, which is why he wants to stay in control.
The aim of that control is to create the best sports team in the world while he runs it. Building a personal legacy does not interest him.
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Was Toto Wolff a Private Equity Investor?
Toto Wolff was neither a private equity investor nor a venture capital investor.
After he decided to stop racing, he spent a short time as an employee in a steel manufacturing company and did not like it. He then read about internet companies in the U.S. Netscape was one of the first he got interested in, along with Yahoo and AOL, the star companies of the time. He lived in Vienna and looked across the German-speaking countries for who was doing the same work in Austria, Germany, and Switzerland. He found little startups that sometimes were not even a legal entity, young people working out of a children's room or a kids' room. The Nasdaq effect brought absurd valuations for companies with n
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Why Is Toto Wolff in Two Minds About Formula 1 Rules?
Toto Wolff is in two minds about writing the Formula One rules. The innovation part of him, and the engineers he listens to, want free reign. A budget cap of 200 million would stay in place, and the rules would be as open as anyone wants. From a scientific standpoint and an engineering standpoint, open rules would be magnificent. The best engineers, with the most capability and the strongest infrastructure, will come out with a car much superior to some of the other teams. The leading car could be five seconds quicker than the next one. Formula One does not want a field with that gap, so the rules are becoming more and more restrictive.
The limit needs to stay sensible. Formula One is still
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How Early Can You Spot a Formula 1 Driver?
Toto Wolff says a kid's karting shows pretty early whether that kid can become a professional racing driver. Even the tiny ones stand out against their peers. An eight-year-old who beats the ten-year-olds in the group is an early sign. A kid going 100 kilometers an hour in the rain, sideways across a corner on a first lap, already has the ingredients for being good.
Racing has no single number that separates one driver from another. John Collison points to cycling, where Tadej Pogacar is the best in the world on threshold power, the power a rider produces for body weight. Threshold watts per kilogram and VO2 max are measurable in cycling. Pogacar's metrics at 12 are unknown, and whether the