Formula 1 is one of the biggest sports in the world and has been around for more than 7 decades. With so much history and massive global exposure, the sport certainly generates a lot of revenue. But you may be left wondering how Formula 1 makes its money.
F1 makes money through several different revenue streams. The main source of income for the sport is selling broadcasting rights to media companies such as Sky Sports and ESPN. Tracks also pay millions of dollars each year to host races, and F1 also has many sponsors that pay for global exposure.
As a global sport, it’s imperative that Formula 1 creates an environment of sustainability for the sport to flourish. Without the ability to generate money, Formula 1 will not survive as a sport, and so below we take a deep dive into the finances behind the fastest motorsport on the planet.
Who Owns F1?
Liberty Media owns F1, and they are an American mass media corporation that was founded in 1991. Liberty Media took over Formula 1 in 2017, promising the fans a new era for the sport. Liberty have been critical in making the sport more accessible to younger fans through social media.
The first change that fans could see from the outside was the updated Formula 1 logo, which replaced the previous one that was used for decades. The sport also took a new approach to social media, something that Formula 1 was notoriously opposed to in the past. Formula 1 became increasingly active on Instagram, Twitter, and YouTube, and Netflix’s Drive to Survive further boosted interest.
It’s no secret that the sport had been suffering from a decline in viewership numbers across the world and even a lack of spectators in the stands for several years. With the takeover in 2017, Liberty Media’s goal was to attract more attention to the sport in two main ways.
The first was to promote the sport to a younger audience. The start of this process was the overhaul of the face of the sport, with the logo change and the sudden social media presence that was implemented, and later the production of the behind-the-scenes Netflix series. Several years after these changes were made, it’s clear to see that they certainly worked.
The second goal that Liberty Media had was to promote the sport in the United States. Following the disappointing US Grand Prix in 2005, the sport had a short-lived stint at the famous Indianapolis Motor Speedway before ultimately leaving the country after the 2007 season. The sport’s reputation was tainted among US motorsport fans, and this was something that had to change.
With Liberty Media in full control of the direction of the sport, they made sure to put further focus on pushing the sport for American fans. Taking on social media and launching Drive to Survive was a start, but soon Formula 1 would have roadshows in famous American cities before ultimately hosting three races on the Formula 1 calendar by 2023.
Key People In Charge Of F1
While Liberty Media is the face of Formula 1 ownership, there are some key figures behind Formula 1 that pull the strings. The leaders of Formula 1 have decades of experience in the sport, which is why they have been put in charge of the series (at least on the technical side) as opposed to Liberty Media members.
Stefano Domenicali is the President and CEO of Formula 1. He essentially has the final say on the sporting side of F1, including decisions such as the tracks the sport visits, the rules that need to be implemented, and the overall running of the sporting side of Formula 1 (as opposed to the business side of the sport).
Ross Brawn is the Managing Director of Motorsports. With decades of experience with Ferrari and even running his own team – the famous Brawn GP that later became Mercedes – he provides excellent insight from a managing perspective. Brawn played a key role in the 2022 aerodynamic overhaul that took Formula 1 into a new era.
Chase Carey is another famous name that you may have heard of, although he has since left his role in the sport. Carey was the CEO and Chairman of Formula 1 when Liberty Media first took over the sport in 2017. He was replaced by Domenicali in 2021 as the CEO of Formula 1.
Who Was Bernie Ecclestone?
Bernie Ecclestone was the previous boss of Formula 1. The British business magnate has a long history in the sport, but his journey into Formula 1 leadership started in 1974. Ecclestone owned the Brabham Formula 1 team, and at the same time established the Formula One Constructors Association along with several other famous names such as Colin Chapman and Frank Williams.
Ecclestone and his legal advisor Max Mosley negotiated several legal issues in 1978, eventually securing television rights for Formula 1 through FOCA. Ecclestone then established Formula One Promotions and Administrations, giving 47% of television revenues to teams, 30% to the FIA, and 23% to his own company FOPA.
Ecclestone’s company would then provide the teams with prize money to ensure that they remained part of the competition as long as they were performing well. This created a more sustainable sport as there was now a more significant revenue stream for teams and for the sport as a whole.
Ecclestone remained in charge of Formula 1 from this point on all the way until the sport was sold to Liberty Media in 2017. Ecclestone was removed from his position as the boss of Formula 1 in early 2017 and replaced by Chase Carey.
How Much Is Formula 1 Worth?
Formula 1 is likely worth somewhere between $5 billion and $15 billion, but it’s impossible to make an accurate estimation of the total value of the sport. Liberty Media, the company that owns F1, has a market cap of $35 billion, while the Formula One Group has a market cap of $15 billion.
It’s difficult to find information on the total worth of the entire sport. The sport has been gaining value over recent years, especially ever since it was taken over by Liberty Media in 2017. The sport has grown in several ways, adding even further value to its net worth since it was bought. With no recent reports on the value of the sport, it’s impossible to give a concrete answer.
However, we can speculate on the total worth of Formula 1 based on what it was bought for in 2017. Liberty Media bought Formula 1’s parent company Del Topco and while it was reported that the total sale of the company was $8 billion, this was in fact the total market cap of the company.
It was later revealed that Liberty Media only paid $4.6 billion as Del Topco’s net debt was valued at $3.4 billion. Liberty Media had acquired the sport successfully in early 2017, and ever since have worked hard at building the sport and tailoring it to the modern world.
The Stock Market
Liberty Media Corp. Series A Liberty Formula One (FWONA) currently has a market capitalization of $35 billion. Of course, this is not the value of Formula 1, but instead the parent company that owns Formula 1.
Formula One Group (FWONK) has a market cap of $15 billion. Formula One Group is the set of companies responsible for the promotion of the sport. The companies that are subsidiaries of the Formula One Group are Formula One Promotions and Administrations as well as Formula One Management.
KEY POINTS• F1 is owned by Liberty Media
• The company bought the rights to F1 in 2017 and they have since transformed the sport
• The sport itself is worth billions of dollars
How Does F1 Make Money?
F1 makes money from contracts signed by the race venues, merchandise sales, broadcast rights, and from its long list of sponsors. F1 brings in revenues of more than $2 billion each year, with the profit in 2021 being around $92 million after all the teams got their share.
As one of the biggest sports on the planet, Formula 1 needs to make enough money to ensure that the sport is sustainable. Without generating enough profit, the sport won’t survive. The ultimate goal is to grow the sport even further and keep it going as the pinnacle of motorsport, which it has been for more than seven decades.
In order to remain at the top of the motorsports ladder, Formula 1 needs to generate massive profits. The sport has several different revenue streams that generate money throughout the course of the season. This allows the sport to pay the staff that work in Formula 1, and it also allows the sport to pay the teams to ensure that they can continue racing.
Motorsport, specifically Formula 1, has always been known as the playground of the rich and famous. Even with all the budget caps and cost reductions, the sport has never been able to shake that stereotype.
Formula 1 Circuits
Formula 1 cars can’t race without a track, and just about every country in the world would love to host a Formula 1 race. There are lots of advantages to hosting a race, specifically for the country’s economy, tourism, and prestige in the motorsport world. It’s tough competition to become one of the 20 or so countries on the Formula 1 calendar to host a Grand Prix.
One of the main sources of income that Formula 1 has is the racetracks that host the events. Formula 1 circuits need to sign contracts with the sport in order to secure their place on the calendar. Formula 1 “sells” the spots on their calendar to suitable race tracks around the world, and they must meet FIA Grade 1 requirements before they can host a race.
Not only are these contracts expensive, but the circuits also usually need to sign a contract that lasts several years. It’s rare to find a circuit that has a contract that is less than three years long. Only in rare circumstances can the contract be broken or voided.
|Country||Cost Per Year||Contract Expiry|
|Saudi Arabia||$55 million||2025|
|Italy (Imola)||$20 million||2025|
|United States (Miami)||Unknown||2031|
|Austria||$25 million||“Multi-year contract”|
|Great Britain||$25 million||2024|
|Netherlands||$32 million||2023 (+2 years optional extension)|
|Italy (Monza)||$25 million||2024|
|United States (COTA)||$25 million||2026|
|Abu Dhabi||$40 million||2030|
|United States (Las Vegas)||Unknown (circuit owned by Liberty Media)||2025|
Above are some of the reported amounts that each Formula 1 circuit pays for their spot on the calendar. Keep in mind that some contracts might be expiring soon as the circuit has been on the calendar for several years.
In the majority of sporting events around the world, the ticket sales go to the organizing committee (Formula 1 Group in this case), but it’s not the same when it comes to Formula 1. Under normal circumstances, the sport would pay the venue to host the event and generate money from their ticket sales.
But in Formula 1, racetracks need to pay the sport to host the race, and then make their money back through ticket sales. This is why you have to pay so much to secure your seats at a Grand Prix. For many spectators, it’s often cheaper to fly to another country and watch the race elsewhere as opposed to their home country – Silverstone is the best example of this.
In some countries, the government will support a circuit when it comes to the hosting fees in Formula 1. This means that the circuit can reduce their ticket prices. This is not the case with Silverstone, making it one of the most expensive races on the calendar to attend.
While Formula 1 circuits pay the sport a lot of money to host the pinnacle of motorsport in their country, it’s still not Formula 1’s biggest revenue stream. The sport makes the majority of its money from selling broadcasting rights. With hundreds of millions of viewers worldwide, media companies such as ESPN and Sky Sports need to pay huge amounts of money to secure the broadcasting rights.
Formula 1 will sign a contract with each of these media companies, locking them into long term deals worth millions, sometimes even billions, of dollars. When a media company secures this contract, they often become the exclusive broadcasting partner in their home country, which means they ultimately gain more customers (those who want to watch Formula 1).
In 2019, Sky Sports secured the rights to become the exclusive broadcasting partner of Formula 1 in the UK. It’s been reported that the deal they signed is worth $1.53 billion for the six year contract. In the US, ESPN signed a deal worth between $75 million and $90 million per year until the end of 2025.
When you consider the fact that these are just two media companies, it’s clear to see why selling television rights is one of the sport’s biggest revenue streams. With hundreds of countries around the world, each with their own broadcasting contract, Formula 1 generates a serious amount of money just from broadcasting the sport on TV.
Formula 1 also uses sponsors to generate money. Whenever you watch an F1 race you’ll notice that some brands feature prominently along the track. From Aramco to DHL and even Rolex, you can find sponsors just about everywhere you look in Formula 1.
The main sponsors that Formula 1 have pay lots of money every year to have their logos plastered all over the circuit. These companies will get exposure in return for the investment that they make into the sport. The money that they pay into Formula 1 will be used to help the sport flourish.
Formula 1’s sponsors also sign long term contracts with the sport, but they do change from time to time. However, the title sponsors such as Rolex and DHL have spent a long time with the sport. Aramco and Crypto.com are the latest additions to Formula 1’s long list of massive sponsors.
Smaller Revenue Streams
Despite the massive amounts of money that Formula 1 generates from selling broadcasting rights and getting income from circuits that host races, the sport also has other smaller revenue streams that are important.
Everything from their YouTube channel to the monthly subscription fees for F1 TV Pro, and even the F1 merchandise sold at circuits and online, can contribute to the overall profits that the sport can generate.
Having these smaller revenue streams helps the sport to manage their expenses and adds further profits to the pool. Formula 1 hires thousands of staff members that need to be paid, so it’s not always as easy as taking the money that the sport generates. As a global sport, Formula 1 runs high costs that need to be covered for every Grand Prix.
KEY POINTS• F1 brings in billions of dollars in revenue each year
• It does so through multiple revenue streams, from sponsorships to venue contracts
• A lot of people work in Formula 1, and so it’s not all profit
How Much Money Does F1 Make From Sponsorships?
F1 likely makes more than $100 million each year from sponsorships. The Aramco sponsorship is said to be worth $40 million a year, with other sponsors like Crypto.com and Rolex reportedly paying tens of millions of dollars each year. There are also many other smaller, but still significant sponsors.
Formula 1 has an extensive list of sponsors that support them. While the majority of the sponsorship deals are unclear, there have been reports on some of the biggest sponsorship deals that the sport has secured over the years.
Heineken is one of the biggest additions to the list of sponsors, and it’s been reported that their deal is worth $337 million. Their main purpose is to promote their non-alcoholic beer and raise awareness about drinking and driving. Rolex is another big sponsor that has a deal worth around $327 million.
It’s not all about money either. Formula 1 has some sponsors that help to reduce their overall costs. For example, they are partnered with DHL, who is the sport’s official logistics partner. In return for major global exposure, Formula 1 has a reduction in their logistics costs.
How Much Money Does An F1 Race Make?
An F1 race likely makes around $100 million or more, but it is spread out across a lot of sources. The track makes a lot of the money through ticket sales to fund their contract for the season and beyond, and F1 also takes a share of the TV rights to pay the teams’ winnings at the end of the season.
One of the biggest factors to consider are the annual hosting fees from the races. For example, Formula 1 will generate more money from the Abu Dhabi Grand Prix as the season finale because they pay much more than most other circuits. Monaco currently pays the least of any other race on the calendar at just $15 million annually.
How Popular Is It?
The other important factor to consider is the viewership numbers. Some races might perform better on television than others, and this is where Monaco often makes up for their low hosting fees as it’s one of the most popular events of the season. With more people tuning in to watch the race, the sport will be generating more money.
One method that we can use to estimate the revenue that the sport generates per race is to take the total income generated from the previous season and divide it into the number of races that were hosted during the season. In 2021 for example, Formula 1 generated $2.14 billion in revenue over 22 races, which equals $97.3 million per race.
Clearly this is taking all of F1’s revenue into account, not all of which comes during the race weekends. However, given that the races are what gets eyes on the sport in the first place, it serves as a useful way to establish what the average race is worth in the world of Formula 1.
What Does F1 Do With Its Profits?
F1 splits its profits between shareholders, teams, and the sport itself. Liberty Media pays Formula 1 teams a set amount each season to ensure that they can continue to compete in the sport. This is to make sure the sport remains sustainable, and teams don’t end up struggling financially.
On top of the standard fee, each constructor is also paid a bonus based on their performance. This bonus works on a sliding scale, and it varies from year to year depending on the profit that the sport has generated. The team that wins the World Constructors’ Championship receives the most prize money, and the team finishing in last place receives the least amount of money.
Having a set figure paid out to each team, along with prize money on top of that figure, allows all teams to afford to compete in the next season. This ensures that the sport has a competitive field, and it reduces the risk of teams struggling financially and going bankrupt, as they have done several times in the past.
Liberty Media also takes their share of the revenue generated as profits, which was around $92 million in 2021.
KEY POINTS• F1 makes billions of dollars each year in revenue
• A lot of this money comes from sponsorships
• The average race makes close to $100 million
• The profits over the course of a season are shared out between teams, shareholders, and the sport itself
Formula One makes money through many revenue streams, with the most significant being through the sale of TV broadcasting rights. F1 also makes money through contracts signed with the race venues, along with via sponsorships that pay tens of millions of dollars each year.
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