A Formula 1 team previously known for its big spending is actually profiting from the series’ new cost cap.

Mercedes saw its profits rise by $60.7 million in 2021, due largely to the $145 million limit placed on teams this season. Profits totaled only $15 million in pandemic-affected 2020.

• Team revenue grew to $423.3 million from $392.4 million last year.
• Mercedes cut 75 jobs related to design, manufacturing, and engineering. Its headcount in administration — not counted against the cap — grew from 157 to 173.
• The company attributed its revenue growth to increased sponsorship and applied science money.

The FIA said on Monday that Red Bull had exceeded the 2021 cost cap by under 5%. It has not yet determined a punishment for the team. Red Bull said its 2021 submission to the FIA was below the cost cap, and it will “carefully review” the governing body’s findings.

F1’s cost cap applies to expenses related to vehicle parts and performance, but not marketing, driver salaries, and other business expenses.

The cap dropped to $140 million this year and will be $135 million from 2023-25.

Cash Flow Accelerating

F1 saw strong growth in the second quarter, with its $744 million revenue up 49% year-over-year. The series flipped a $43 million loss in Q2 2021 into a $49 million profit.

Along with crowds returning in full, F1’s Paddock Hospitality Club luxury fan experience has proven more popular than ever.

Google could be the next tech giant to snag naming rights to a soccer stadium.

Tottenham Hotspur is reportedly in talks with the company for naming rights to the club’s $1.1 billion home, which opened in 2019. 

Spurs chairman Daniel Levy has been interested in securing a deal for the 62,850-capacity stadium with the “right brand, on the right money.”

• Football Insider previously reported the Spurs are holding out for a deal worth $32.8 million per year for at least 10 years. 
• Nike and Amazon were reportedly top contenders for a deal in 2020.

Google would be the latest technology giant to grab soccer stadium rights.

In March, Spotify purchased naming rights to FC Barcelona’s Camp Nou stadium for a reported $310 million. It is thought to be the most lucrative naming rights deal in European soccer.

Tottenham posted a $106.9 million loss for its fiscal 2021, and its club debt increased to $943 million from $808.1 million after 2020.

Google’s Gigs

Google isn’t new to sports deals.

In March, the company struck a multiyear deal with McLaren’s Formula 1 and Extreme E teams. In October 2021, Google announced a marketing and technology deal with the NBA, and last week, Google Cloud renewed its agreement with MLB.

The trend of owning multiple soccer clubs continues.

Paris Saint-Germain owner Qatar Sports Investments has entered an agreement to purchase a nearly 22% stake in Portugal’s SC Braga — the state-backed fund’s second soccer venture.

Qatar Sports Investments will reportedly pay roughly $18.4 million for the stake acquisition, which is expected to close in the coming months. Bloomberg reported that the price tag implies a valuation of $88 million, based on an expected media rights increase.

• Qatar Sports Investments is interested in SC Braga’s potential for growth, according to the Financial Times. 
• The club is currently third in Portugal’s top division.

Qatar Sports Investments acquired a majority stake in PSG in 2011 for roughly $67.9 million and backs the Premier Padel tour. In 2019, it held discussions for a minority stake in Leeds United.

Multi-Club Movement

The fund joins a growing list of multi-club owners. Deloitte previously reported that there are over 70 multi-club groups operating — more than double from five years ago.

Abu Dhabi-backed City Football Group has full or part ownership in 12 clubs including Manchester City and New York City FC. RedBird Capital completed its acquisition of AC Milan for $1.2 billion in August and also owns Toulouse FC.

Chelsea FC owner Todd Boehly recently said he was interested in creating a multi-club group. Boehly led a consortium that purchased the club for $5.2 billion in May.