How F1 PRINTS MONEY | Inside the WORLD’S RICHEST Sport!

The Billion-Dollar Industry of Formula One

Formula One turned over more than 3.6 billion dollars in 2024. That’s enough to buy seven Airbus A380s. The commercial rights for Formula One were purchased by Liberty Media in 2017, and since then, the sport has exploded in popularity, thanks in part to shows like Drive to Survive and the rise of social media.

But where does all that money come from? Liberty Media is a publicly traded company, and they have three main sources of income:

• Media Rights: About 33%, or 1.2 billion dollars, comes from media rights. This includes payments from all but one race, which pays tens of millions of dollars. The only exception is the Las Vegas race, as Formula One owns and operates it. So, if it makes a profit, they win; if it loses, they lose.
• Ticket Sales: Revenue from ticket sales, particularly for the Paddock Club, contributes significantly to their earnings. However, in 2024, the pricing for the Las Vegas experience deterred many attendees, leading to decreased ticket sales.
• Other Revenues: This includes facilitating the shipment of cars and equipment to events outside Europe, which is an income source I was surprised to see in their annual report.

Media Rights and Viewership

Back to media rights, they generated around 1.2 billion dollars, allowing 450 million people to watch races on TV. In 2024, Formula One had:

• 11 free-to-air television agreements
• 13 pay TV agreements
• 27 agreements covering both free-to-air and pay TV

Key broadcasters include Sky UK, ESPN in PanLatin America, Canal Plus in France, and many others, all contributing significantly to F1’s revenue.

The Importance of Sponsorships

Sponsorships are vital in Formula One because businesses want access to its growing audience, particularly the demographic of women aged 18-34. F1 sponsorships take the form of trackside signage and race title sponsorship packages. Major players like MSC and Qatar Airways pay millions to reach this audience, with contracts typically lasting three to five years.

Interestingly, Rolex, which has been a long-time sponsor, was replaced this year by Tag Heuer due to financial competition from LVMH.

The Costs of Running F1

Despite generating 3.6 billion dollars in revenue, Formula One has considerable costs. In 2024, teams shared 1.26 billion dollars. Ferrari, for instance, still receives a long-standing team bonus of about 5% of the total prize pool, which translated to roughly 65.6 million dollars last year.

Additionally, there’s a past performance pool of 123.3 million dollars awarded based on teams’ placements over the last ten seasons.

Team Earnings and Driver Salaries

So how much do teams earn? Here’s a rough breakdown:

• Red Bull: 151 million
• Mercedes: 141 million
• Ferrari: 132 million
• McLaren: 122 million
• Aston Martin, Alpine, Williams, and others follow with varying amounts.

Interestingly, driver salaries are not capped and can significantly impact team budgets. For example, Max Verstappen is estimated to earn 65 million, while Lewis Hamilton is at 60 million.

The FIA and Ticket Sales

It’s important to note that the FIA regulates Formula One and owns the world championship. They grant exclusive commercial rights to Formula One until 2110.

Regarding race tickets, the money doesn’t go to F1. When an organizer pays a fee (usually between 50-70 million dollars), they keep all ticket sales, excluding Paddock Club revenues.

Conclusion

In summary, Formula One is a complex web of revenue sources, costs, and strategic partnerships that contribute to its status as the world’s richest sport. It’s a fascinating industry that continues to evolve, driven by fan engagement, media rights, and sponsorships.