Uncovered: The eye-watering costs behind creating an F1 team

With the popularity of Formula 1 at unprecedented levels, the value of teams has increased into the billions.

It therefore comes as no surprise that there are those interested in joining the grid, looking to benefit from that rise. But what does it really cost to get a new F1 team started?

How much does it cost to start an F1 team?

Formula 1 is one of the most expensive sports on the planet, with teams investing hundreds of millions of dollars annually to field two cars in 24 races a season.

The resulting engineering marvels are the product of over 1,000 people’s efforts, employ cutting-edge design and manufacturing techniques, and are driven at incredible speeds by the most skilled drivers available.

Nothing about F1 is cheap; McLaren paid over $6 million (£4.5m) just to enter this year’s competition. Cadillac, set to join the fray next season, will pay in the region of $700,000 (£521,000) simply for the right to line up on the grid.

The American operation will be F1’s first new team since Haas joined in 2016. In the decade since, much has changed, most notably financially, with the sport – and its teams – healthier than ever before.

Changes to the Concorde Agreement meant the distribution of prize money is less top-heavy than it once was, and the introduction of financial regulations placed a cap on spending.

This year, teams are permitted to spend $140.5 million (£105m) to go racing, though a number of significant elements of the team’s operation fall outside of that figure. It is why, for F1 2026, the cost cap will increase to $215 million (£160.2m). There are still costs outside of that, but it offers a guide price of sorts for what it costs to run a modern Formula 1 team.

However, before one can consider those everyday costs, any prospective operation must first find its way on to the grid.

The process to gain entry to the world championship begins with the FIA opening an Expression of Interest. The triggers for that to occur are not publicly available, though historically, EOIs have opened when there has been sufficient clear market interest.

During the EOI, the FIA gathers fundamental information such as the candidate’s details, identity of shareholders, and information regarding the individuals involved in the project. A non-disclosure agreement is also required, along with a non-refundable $20,000 (£14,800) administration fee. A further $280,000 application fee for those who progress to the formal application process follows.

The entity now known as Cadillac took part in the most recent EOI, under the Andretti Global moniker, as did three other organisations including Rodin, Hitech, and Lkysunz.

To succeed at that point, an application needs to demonstrate that it is a serious proposition, with the governing body looking at finances and skillset within the organisation, along with a myriad of other elements.

Having a physical and established based speaks well to the seriousness of an organisation, but comes at a price.

The requirements for an F1 factory vary wildly from team to team, with Aston Martin at one end with a lavish new facility, and Haas at the other with a far more modest building in an industrial complex in Banbury. As a guide, the Leafield facility from which Caterham operated, was sold off for £5.5 million ($7.43m) in 2015. It would be fair to suggest therefore that the structure alone needed to house a basic F1 team would run in the region of £10m at least.

On top of that are the machines necessary to produce and maintain the cars, systems for the designers, and the myriad of other items, such as software and staplers, necessary to run a world-class, high-tech engineering business. That can easily run into the hundreds of millions in addition to the cost of the premises and application fees, with one source suggesting as much as $400 million (£295m).

But the costs don’t end there. There are significant costs associated with staff, too, with most teams running a headcount well into the hundreds. For Haas, the smallest team on the grid, those costs ran to over £10 million ($13.5 million) in 2023. That same season, Alpine spent £76.1 million ($102.8m) on staff and entitlements.

Having submitted an entry application and been approved by the FIA – which cannot reject an entry provided it meets the entry criteria – there is the awkward matter of the Concorde Agreement and the anti-dilution fee.

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Originally introduced in 2021 as a means of compensating teams for the resulting reduction in prize money payments, the antidilution fee was first set at $200 million (£147.8m). That sum only covered the current Concorde period, which elapses at the end of this year, beyond which there is currently no figure defined. Nonetheless, Cadillac agreed to pay a reported $450 million (£332.5m).

Under the next iteration of the Concorde, the anti-dilution fee will be tied to the sport’s own revenues and is therefore likely to grow by the time a new team is in a position to enter the championship, perhaps to £370 million ($500m).

Allowing another £400 million ($541.2m) to fit out the factory with equipment and everything else needed to make the operation a going concern, the costs associated with starting a new team from scratch run to more than £830 million ($1.12bn). It’s a significant investment, far beyond the euro 280 million ($328m; £242.5m) earmarked for the proposed Caterham revival.

The start-up costs are, however, marginally cheaper than buying an existing team, though not significantly slowly. Only Haas is less expensive, with Sportico estimating the US-registered operation is worth $1.02 billion (£750m).

There are, however, additional costs, such as an engine or technical relationship, the depth of which has the potential to dramatically increase the necessary spend in the short team.

Even still, with the sport seeing positive revenue growth, which is fed back to the teams who have their own spending capped, valuations look likely to continue to rise. Despite the significant start-up costs, F1 appears to offer a positive return for a well-run organisation, provided F1 continues to grow and it can prove itself competitive.

However, to do that, it must meet the ongoing financial obligations of running a Formula 1 team.

Read next: Why Sergio Perez and Valtteri Bottas make sense for Cadillac’s first driver line-up