# How Toto Wolff Built a £4.6bn F1 Team: One Flight, and the Exit Discipline He Has Kept for 25 Years

Source: Realpha Blog (blog.getrealpha.com)
Original article and charts: https://blog.getrealpha.com/en/blog/cheekypint-2026-10-20-how-toto-wolff-built-the-most-valuable-team-in-f1/

> Notes from the 20 October 2026 episode of Cheeky Pint: Toto Wolff on the F1 cost cap, team valuation multiples, and how he liquidated nine dot-com holdings before the 2000 crash. Educational notes only — no investment advice, no stock recommendations.

Published: 2026-10-21
Locale: en
Tags: F1, sports business, valuation multiples, founder control, exit discipline, podcast notes


![A late-night garage walkway receding into the distance, an engineer in the foreground reading a tablet beside an opened rear end, overhead lamps stretching the car's silhouette far down the lane](/covers/cheekypint-2026-10-20-how-toto-wolff-built-the-most-valuable-team-in-f1-cover.png)

> Fill a vessel to the brim and you had better have stopped sooner; hone a blade to its keenest and it will not hold.… To retire once the work is done and the name made — that is the way of heaven.
>
> —— *Laozi*, Chapter 9 (Spring and Autumn period; translation mine)

On the 20 October 2026 episode of *Cheeky Pint*, host John Collison of Stripe sat down with Toto Wolff, CEO and co-shareholder of the Mercedes F1 team. Wolff put the numbers on the table himself: around $1bn of annual revenue at roughly a 30% margin, and a transaction last year, when he sold part of his stake, that priced the team at £4.6bn — about 15 times EBIT. He called that multiple conservative by the standards of sports assets, on two conditions: F1's audience keeps growing, and none of the three shareholders wants to sell. What stayed with me from this episode is how he made two particular decisions: clearing out nine internet holdings before 2000, and, in 2013, taking apart Mercedes' expectations before agreeing to run their team.

## Late 1999: One Hour From Bonn to Vienna

Wolff did not start in a team principal's office. After his driving career he spent a short spell employed by a steel company, disliked it, and started reading about American internet companies — Netscape, Yahoo!, AOL. His question was unglamorous: who is doing this in the German-speaking countries? So he drove to them one by one and offered the same deal — I'll help you raise equity or list you, and if it works I'd like 10% to 50% of your company.

One of them was sms.at, built by a teenage boy in Graz, Austria. A text message cost nine cents then, and of Austria's nine million people, two million were using his free web portal. Wolff asked how it worked. The boy said he hacked into the SMS servers of the big telcos, and when they shut him down he moved: today Nigeria Telecom, next week Norway. Wolff wrapped it into a legal entity and went to see Telekom Austria and T-Mobile, who told him: we hate it, we can't shut it down, what can we do together? Two years later the company, with almost no revenue, sold to T-Mobile for 250 million.

The day they signed in Bonn, Wolff flew home with his CFO and a glass of cheap bubbly. He said it was a good transaction. The CFO — fifteen years his senior, formerly running M&A at Austria's national steel company — replied, "Something is going wrong here." His reasoning: a business with tiny revenue and a large customer base has a lot of potential and no known way to monetise it or repay the capital expenditure. His own specialised aluminium business, generating 30 million in EBIT, was valued at a fraction of it.

![Three boxes side by side: the first holds one small block for tiny revenue, the second a wide mass of blocks for a large customer base, and the third is an empty dashed frame with a question mark for the missing path to monetisation and return of capital; a brace below encloses only the first two boxes, marking that the valuation was built on those two alone.](/figures/three-questions-before-selling-en.svg)

That one-hour flight sent Wolff back to his whole portfolio of nine investments. They decided to exit all of them, starting at the end of 1999 and running through 2000. When the market collapsed in spring 2000 people were still hoping for a rebound; it never came back. Of the nine, only one Israeli startup could not be sold.

![Nine blocks in three rows, eight struck through and greyed out to mark them sold, with only one still solid; below, a timeline runs from late 1999 into spring 2000, marking the selling as happening before the crash.](/figures/nine-positions-cleared-en.svg)

What I keep turning over is the ownership structure behind that call. He held about 90% of the vehicle himself — no fund, nobody else's money. He says plainly that with other people's capital, management fees and carry, he would have played it more aggressively. He also says he came from a poor family, that financial safety has always driven him, and that once the sum in front of him was more than he could spend, stopping became easy.

## 2013: Taking the Expectation Apart First

Mercedes bought Brawn, the 2009 champion, expecting a dominant force. Year after year it underperformed; by 2013 the team had won a single race. Wolff was then running Williams alongside its founder, and Williams had also won one. A Mercedes board member invited him to Stuttgart and asked: how can your private little team win a race when we, Mercedes, cannot?

His answer is my favourite stretch of the episode. He looked at their setup and their numbers, then came back and asked what their aspiration was. World championships, they said — we bought the team that won one. Then one of us is wrong, he replied, because I work on similar budgets and I think about finishing in the top six. They said the budgets were not the same, that they spent 100 million more. He said: you spend that 100 million on Michael Schumacher and Nico Rosberg; I have a pay driver from Venezuela — who, by the way, won the race.

![Two bars of similar height stand for similar budgets, with the Mercedes bar carrying an extra block marked as the additional 100 million; above the bars the target heights differ sharply, one reading world champion and the other top six, and an arrow from the extra block points to the driver.](/figures/same-budget-different-target-en.svg)

Mercedes' own conclusion was that a corporate structure cannot run an F1 team, that it needs an entrepreneur empowered to decide on the spot. They asked him to do it. He had to decline, being a Williams shareholder and a lifelong entrepreneur. Funny you say that, they answered — we've just bought back 40% from the Abu Dhabi sovereign fund, you can have it. He said he had done well in life but could not afford it. They asked how much he was prepared to put in; he named a figure, explaining that he had been through financial hardship and did not want to go back. Mercedes financed the rest.

That structure shaped the decade that followed. As he puts it: until I really badly screw up, I am responsible for my decisions and I cannot be fired. Other team bosses report to someone — Ferrari's principal is one of ten direct reports to the CEO, Red Bull's answers to a shareholder group, Audi hires people from the group on salary and bonus — and a decision taken without escalating it can cost them the job. His own horizon is ten years rather than one. He quotes Red Bull founder Dietrich Mateschitz: as an entrepreneur you need to be a downhill ski racer who can also stop and walk back up the hill.

## After the Cost Cap: Science Gives Way to Competition

F1 introduced a cost cap a few years ago, a little over $200 million a year, counting every engineering resource deployed. Wolff was against it, because Mercedes had the might and his worst case was losing to Ferrari or Red Bull rather than to McLaren or Williams. Chase Carey, then F1's CEO, told him: we need to protect you from yourselves. In the end it was take it or leave it.

The cost was the part he loves most — lab work and long-horizon research — which now competes for the same compute as a front wing due on the car in three months. He does not claim speculative R&D vanished, only that its scope shrank. The gain is competition: under unlimited budgets, only Mercedes, Ferrari and Red Bull won races.

![Two horizontal stacked bars show how resources were allocated before and after the cost cap: the upper bar is long with a thick band for long-term research, while the lower bar is short and its long-term research band is squeezed thin, with near-term parts for the car taking most of the space instead.](/figures/cost-cap-reallocation-en.svg)

Tighter rules raise the value of grey areas, and their internal process for those is worth borrowing. When engineers find a loophole, the team stages a mock trial: the people who invented it play prosecutor and must attack their own argument, another group of engineers defends it, and the general counsel plus Wolff sit as judges. The test is how convincing the defence is, and whether you can destroy the claim that the thing is legal. Only then do they open the dialogue with the FIA.

His example is DAS. A steering wheel turns left and right; they added a dimension, letting the driver push and pull it to change front-wheel toe, dragging the tyres along inefficiently in order to heat their surfaces. Months before it reached the car they called him to a test rig, told him to turn, then to push and pull, and his reaction as a former driver was "that doesn't go" — a wheel belongs fixed where you put it. The actual race drivers climbed in, asked to try it, and it worked. It was banned a year later. Maybe, he says, we lost the political argument.

![A courtroom seating plan: the bench at the top reads chief legal officer and chief executive, prosecution and defence sit facing each other on either side, the prosecution side is marked as the very engineer who invented the thing, and an exit arrow at the bottom leads out to the FIA.](/figures/internal-mock-trial-en.svg)

The compression-ratio row is more telling. Rival teams argued Mercedes measured cold and then grew in size when hot, extracting more power. Wolff declines to confirm that part, but he does say this: the argument went back and forth for months, it made no difference at all to the team's performance, and they fought it on the sheer principle of innovation.

## After 2020: From Marketing Line Item to Business

When F1 pitched *Drive to Survive*, Netflix paid very little. Wolff sat down with his Ferrari counterpart, who said they were there to win a championship and not to play Cirque du Soleil; both teams skipped season one. Looking back he thinks that helped the show, because without the two giants the cameras had to follow smaller teams and found an underdog story. Then COVID arrived, everyone stayed home, and F1 was the only sport racing, because the travelling circus could seal itself off.

The audience changed shape. He cites 42% female fans and names the fastest-growing group as women aged 15 to 25; F1 Academy, the female series his wife Susie runs, now draws some of them towards driving and others towards engineering and marketing. He is firm that the reality show only works because underneath it sits a credible sport with rules, where the best machine wins — the entertainment grows on top of the sport.

![A horizontal proportion bar split into two parts, with the female share at 42% and the 15 to 25 slice inside it marked as the fastest-growing piece, branching downward into three destinations: driving, engineering and marketing.](/figures/audience-reshuffled-en.svg)

The economics changed too. Teams used to lose money and count it as marketing; today several run EBIT margins above 30% and distribute dividends. Capex is light because nobody owns the stadium, which also costs them the stadium revenue. Comparing himself to US franchises, he says he is a fundamentals man who would never value a business on revenues — return on investment, cash flow and profit. On the revenue multiple implied by the Lakers sale, Mercedes would be worth 10 to 12 billion, which he considers beside the point given his holding period.

As for going public: Williams did, and it was not a success. Twenty-odd races a year means reporting twenty-odd times a year, in a sport that swings from mania to depression inside a week.

![The same asset measured against two rulers: a profit multiple on the left yields one height, a revenue multiple on the right yields a height more than twice as tall, and the middle notes that the asset has not changed, only the ruler.](/figures/two-rulers-one-asset-en.svg)

## What to Watch Next: How He Picks People, and Who Takes Over

A third of the episode is about selecting people, and his view runs against the quantitative instinct. Cycling has threshold power — the best rider in the world is visibly the best on watts per kilogram. F1 has no such number. The stopwatch never lies, but beneath it sit three layers: the technical ability to set the car up, the ability to work with engineers, and enough social competence to keep sponsors well treated. Extremely talented kids, he says, have gone nowhere for being bad people or not intelligent enough.

![Above a waterline only a small block labelled the stopwatch shows; below the surface three layers of ability stack up, and the lowest and largest is labelled feel, marked as something that cannot be measured or taught.](/figures/stopwatch-and-the-layers-below-en.svg)

The hardest layer to measure he calls speed: the billions of sensors in a human body adding up to a feel for what the car is doing underneath you. His example is a line from Lewis Hamilton — the car understeers from the front axle to where I sit. How can the middle of a car understeer? The engineers could not identify what he meant, but that was what his body was telling him. Great drivers, Wolff says, strap the car onto themselves, and that is genetics.

He applies the same filter across 2,500 employees — about 150 travel to the track. There are not two superstars in the team, he says, there are two and a half thousand. More than a decade ago they borrowed a line from the All Blacks' training ground, "No dickheads", and still run it: a brilliant engineer without humility, integrity, honesty and enthusiasm has no future there, and the genius asshole has no place. Engineers who fall in love with an idea and need one more simulation run, forceful enough to push the organisation past a reasonable point, are no longer employed. He wants them in love with the result, and a project is judged by its contribution to lap time rather than to a department's target.

On succession he is unsentimental. He has no interest in a building bearing his name; he wants a structure that survives him, and is currently vetting two or three people to divide his job between. A clean break is not available while his family still owns shares, so an executive or non-executive chairmanship may happen — defined precisely, because sitting in the grandstand telling people how you would have done it does not count. He also says the family should only run it if they can run it best, not to be mediocre, and that his children have no interest.

## Thought One: I Know I Should Sell — How Do I Know It's Now?

This is where I get stuck. Late in a bull run every argument you read supports holding, and selling makes you look like you stopped believing in the company that made you money. Wolff describes it well: talking about getting out sounds cowardly, so nobody does, yet the most successful investors all have that radar.

The CFO's test on that flight is reusable, and it has nothing to do with price. He strung three things together: how small the revenue is, how large the customer base is, and whether a proven path exists to turn those customers into cash and repay the capital. sms.at scored beautifully on the first two, blank on the third — and the valuation came from the first two. Wolff draws the parallel to today's AI environment himself.

One boundary matters. The test says "the link the valuation depends on is unproven", not "therefore it will fall". sms.at sold for 250 million; on that trade the CFO was the one who was wrong. What got validated was something else — he named the unanswered question, and Wolff went home and ran it across all nine holdings. So I use it as a scanner rather than a sell signal: write down, for each position, which unproven path its valuation rests on. The ones where I cannot write the sentence are the ones to reopen.

## Thought Two: Why Does the Best One Trade at the Lowest Multiple?

Collison raises a comparison that made me stop. In AI, he notes, some of the most durable businesses — a TSMC, an NVIDIA — trade at fairly reasonable multiples despite growing fast; and the same thing shows up here, where the strongest team in the biggest sport carries one of the most sensible multiples. Wolff's answer: that's okay, we want to be seen as the serious people in the room.

What I take from it is a sorting question. The same asset can be priced by three kinds of buyer: one computing cash flow, one buying scarcity (eleven F1 teams, thirty-two NFL franchises), and one buying the courtside seat — Wolff points straight at people who made ten billion in a low-visibility business and will spend a large chunk of it to be prominent. Those three pay different prices, and when the third sets the clearing price, the multiple detaches from anything you can compute. Some US franchises have fundamentals underneath them, he says, and some are being dragged along at valuations that are no longer real.

![Three kinds of buyer stand before the same asset, and the prices they bid are drawn as three bars of differing height; the third breaks through a dashed line marking the limit of what can be calculated, noting that this height was not arrived at by calculation.](/figures/three-kinds-of-buyers-en.svg)

So when a multiple looks low, ask who is pricing it and on what. A low multiple set by cash-flow buyers is one situation; a high multiple set by someone buying a seat tells you nothing about your own holdings. My own mistake has been using the second to argue that the first still looks cheap.

## The One Thing to Take Away

What this episode left me with is a single idea: **you need someone who can ask an unwelcome question about the thing you are proudest of, on the day you are proudest of it — and you need to be able to hear it.** Wolff was holding a celebratory glass of bubbly, and the man beside him, fifteen years older and from heavy-industry M&A, said something is going wrong here. No numbers, no model. It was worth nine investments. People like that do not show up in your messages by themselves, because they are usually outside your circle and they do not volunteer to dampen a celebration.

Here is something I've tried, if you want it: take a decision you feel good about lately — a job change, a purchase, a project you started — and write one sentence saying what has to be true for it to work. Then take that sentence to someone you know will disagree with you, and ask one question: where do you think this breaks? Don't argue; write down what they say. The lines I wrote down all made me uncomfortable that day, and a few months later two of them turned out to be right.