Would you rather own an NFL franchise or an F1 team?

ClaudeAi takes a deep dive. Personally, I'd prefer to own an NFL team. More profitable and considerably more violent.

NFL Teams

Revenue (2024):

• Average total revenue per team: ~$700M

  • National revenue (shared equally): $433M per team

  • Local revenue: varies by team ($200-300M+)

• Range: Dallas Cowboys lead at $1B+, while smaller market teams around $650-700M

• Revenue sources:

  • TV/media rights (62% of total revenue, shared equally)

  • Tickets and luxury suites (19%)

  • Sponsorships

  • Merchandise

Expenses:

• Salary cap (2023): $224.8M per team

• Additional costs: Player benefits, stadium operations, team expenses

• Average operating income: $142M (profit)

• Dallas Cowboys operating income: $564M (highest)

Financial Model:

• Highly profitable, with most teams generating substantial profits

• Strong revenue sharing creates financial parity

• Average team valuation: $6.5-7.1B

F1 Teams

Revenue (2024):

• Average total revenue: $190-210M per team

• Range:

  • McLaren (2024 champion): $161M in prize money

  • Last place team: minimum $69M

• Revenue sources:

  • Prize money from Formula 1 Group (45% of F1's total revenue distributed)

  • Sponsorships ($60M+ for top teams)

  • Parent company support (for factory teams)

Expenses:

• Budget cap (2024): ~$165M (adjusted for inflation and 24 races)

  • Base cap: $135M nominal

  • Additional costs NOT included in cap:

    • Driver salaries: $20-40M

    • Top executive pay

    • Marketing: $20-30M

    • Capital expenditures: $20-100M+

    • Power unit development: $50-100M (for factory teams)

• Total actual spending: $250-350M annually

Financial Model:

• Most teams lose money (expenses exceed revenue by $50-100M+)

• Only Mercedes consistently profitable

• McLaren achieved $73M profit in 2024 (championship year)

• Red Bull Racing: only $1.68M profit despite winning championships

Key Differences

Profitability:

• NFL: Highly profitable across the board

• F1: Most teams operate at a loss despite rising valuations

Revenue Scale:

• NFL teams: 3-5x more revenue than F1 teams

• NFL average: ~$700M vs F1 average: ~$200M

Cost Structure:

• NFL: Controlled by salary cap, most costs are player salaries

• F1: Budget cap covers only ~50% of actual costs; technology development is massive expense

Business Model:

• NFL: Revenue-generating sports franchise

• F1: Often treated as marketing/R&D investment by parent companies (Mercedes, Red Bull, Ferrari)

Valuation Despite Losses:

• F1 teams valued at $1-2B+ each despite losing money, because valuations rise 30-50% annually

• Investors accept operational losses for long-term valuation gains

The fundamental difference: NFL teams are profitable businesses, while F1 teams are often expensive marketing and technology platforms that lose money operationally but gain tremendously in brand value and parent company benefits.