Engines roar, tires smoke, the accelerator pedal is depressed. The Formula 1 circus was in danger of becoming boring due to the Red Bull team’s recent superiority, but the dominance of Red Bull-Driver Max Verstappen (26) now seems broken. After McLaren driver Lando Norris (24) took his first race win in Miami, things didn’t go well for Red Bull in Monaco either. Charles Leclerc (26) took his Ferrari to the podium, while Verstappen only managed sixth place. Gone are the days when Verstappen dominated the racing series. TV channels and marketers formula 1 should be happy about that.
In total, the cars will be taking part in 24 Grand Prix races this season. A race every two weeks. “Tipping point,” an insider told manager magazin, “even more racing will be difficult.”
Things are likely to get really exciting from 2026: The FIA, the world automobile association, which sets the rules for Formula 1, has changed the specifications for the engines at this point: around half of the power will then be generated electrically and e-fuels will be mandatory. Whoever drives in front is completely open. In any case, the Formula 1 operators are hoping for even more attention for the expensive racing circuit.
Who owns Formula 1?
The Formula 1 racing series belongs to the media group Liberty Media. The motorsport association FIA issues the licenses, but only has sporting sovereignty.
Who is Liberty Media?
Liberty Media is majority owned by John Malone (83). The billionaire’s empire includes TV channels, newspapers, film studios, music providers, cable network operators, and also sports commitments such as the Atlanta Braves MLB team (enterprise value at over two billion dollars), Formula 1 (enterprise value at 17.1 billion dollars ) and most recently also in the MotoGP motorsport series for motorcycles, which cost Liberty $4.2 billion. Liberty’s empire also includes lesser-known leagues such as the Drone Racing League, Meyer Shank Racing and the Kroenke Arena Co. “Forbes” recently named Liberty once again the world’s most valuable sports media company: estimated value at around $21 billion
.
In 2016, the US company Liberty Media took over the Formula One Group for a total of $8 billion, thus ending the long-standing dominance of Bernie Ecclestone (93). He bought the rights from the FIA at the beginning of the millennium for $360 million and later founded the Formula One Group. All event and marketing rights for the racing series are bundled in the listed company.
Since Liberty Media’s takeover, the racing series’ total revenue has increased by more than 20 percent and profits have increased by more than 60 percent. Greg Maffei (63), President and CEO of the group, was jubilant at the presentation of the 2023 annual results: “Formula 1 had another fantastic year with double-digit growth in all sources of income.” The Las Vegas Grand Prix in particular caused a stir . “We had strong engagement across all platforms, had record visitor numbers and were once again the fastest growing league on social media,” said Maffei.
In fact, according to a report from management consultancy PWC, social media following has increased by 145 percent in four years. The average number of visitors to the local races also increased by 31 percent.
With “Drive to survive” to success
The company achieved this with consistent marketing across all channels. The pivotal point is the documentary series “Drive to survive”. Since 2018, a Netflix team has been letting viewers take a look behind the scenes of Formula 1. Each season gets its own season, the sixth season is currently running.
“When it comes to marketing, everything is geared toward entertainment.”
Christoph Bertling, Cologne Sports University
“With ‘Drive to survive’, new fans have found their way to Formula 1,” confirms McLaren boss Zak Brown (52) to the “Financial Times”
. In addition, all social channels are used, fans are kept up to date with information about drivers, racing teams and races, including computer games. “As a result, Liberty Media is incredibly successful,” says Christoph Bertling (50), director of the Institute for Communication and Media Research at the German Sport University in Cologne, to manager magazin. “When it comes to marketing, everything is geared towards entertainment and moves away from journalistic reporting.” With success, as the sales and viewer numbers show.
Las Vegas breaks the record
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Chasing records: Formula 1 in Las Vegas
Photo: John Locher / dpa
Especially in the USA was the strategy, after all there are three races taking place in the USA alone. In the fourth quarter of 2023, Liberty Media also recorded a record: sales grew to $1.23 billion in the three months, more than ever before in a single quarter. “Revenue from racing promotion increased primarily due to the Income from ticketing of the first Las Vegas Grand Prix
“, it was said. Certain fees have also been increased. Las Vegas has a special meaning for Liberty Media as it is one of the few racing events that Liberty organizes and markets itself. The media group bought the site specifically for this purpose for $240 million.
Who broadcasts the Formula 1 races live in Germany?
The pay channel Sky broadcasts all of the Grand Prizes. RTL also shows seven races on free TV. These are the events in Bahrain, Hungary, Belgium, Italy, Azerbaijan and Las Vegas.
In 2023, an average of around 588,000 people in Germany watched the live races on Sky Deutschland. Significantly more viewers can be gained on fee TV on RTL. At the beginning of 2024, around 1.9 million viewers (market share 14 percent) tuned in to RTL to watch the first race. However, compared to previous live broadcasts, RTL lost significantly. In 2022, the station regularly reached well over two million viewers, and a year before it peaked at over four million.
Accordingly, Liberty Media hit the ticket prices. A “paddock place” with a visit to the racing stables and the possibility. Speaking to drivers or employees cost around $20,000, the simplest standing room ticket for three days was still available for $500, and the cheapest grandstand seat was $1,700.
When it comes to marketing, the group is now drawing on the resources of the entire group. In addition to the actual competitions, side events with pop stars and celebrities provided additional income off the racetrack. In addition, the US television fan base is growing. According to TV broadcaster ESPN, the number of viewers increased to an average of 1.28 million per race in the USA alone. Even if the numbers do not seem overwhelming compared to the NBA finals with over eleven million viewers or the baseball championship finals with more than nine million viewers, they also show that the racing circuit in the USA still has potential.
Formula 1 in Germany: Audi will join in 2025
Compared to the USA, this is reflected in Germany The success of Formula 1 is not reflected in the same way – TV ratings in this country fell again at the start of the 2024 season. However, the fire in Verstappen’s car at the race in Japan subsequently caused ratings to rise. And the race in Miami also attracted more viewers in front of the screens.
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Nico Hülkenberg in the Haas car in Miami
Photo: Jim Watson / AFP
“There is a lack of a successful German driver,” complain insiders. The only German is Nico Hülkenberg (36), who is currently driving for the US team Haas, but from 2025 for the future Audi-Team (Sauber) stands up. Experts also criticize the fact that there has not been a single Formula 1 race in Germany since 2020. Instead, the cars drive in neighboring European countries, in Saudi Arabia, China, Azerbaijan, Las Vegas and Singapore. India, with its emerging middle class, is also considered a future market.
“Formula 1 could develop more and more into a niche sport in Germany,” predicts Bertling. In the end it could only be seen on one of the special interest channels. And this “in the country of the inventor of the automobile,” as the “FAZ” recently noted.
Liberty Media doesn’t seem to care much about this, after all the company has relaunched the US market and new markets have also been opened up. Last year there were reports of talks between Formula 1 and the operators of the legendary Hockenheimring, but they had no consequences. The financial ideas obviously warn too different. Stefano Domenicali (59), head of Formula 1, told “Bild am Sonntag”: “We’re not asking for 100 million euros for a Grand Prix – but we’re not welfare either.” A Grand Prix must be worthwhile for his company. Whether just the entry of the VolkswagenAudi’s subsidiary at Team Sauber can boost Formula 1’s popularity in this country again remains an open question.
How is Formula 1 financed?
Horrific sums of money flow into the development of Formula 1 cars and teams. Television stations spend several million euros on the broadcast, race organizers pay seven-figure sums and sponsors invest millions of dollars so that their banners can be displayed on the racetrack, the fan zone or on the racing cars. Formula 1 is an expensive sport.
For Liberty Media, the racing series is a lucrative investment. In 2023, Formula One revenue reached a record high of around $3.2 billion. They mainly come from the sale of TV rights, the teams’ entry fees, payments from race organizers, sponsors and also from ticket sales. Liberty Media boss Maffei put the profit at $392 million.
A television deal Liberty signed for Formula 1 in 2022 for a three-year term is reportedly worth at least $75 million a year, roughly 15 times the value of the previous contract.
For comparison: The two broadcasters ESPN and TNT spent a total of $25 billion for the nine seasons from 2016 to 2025 in order to be able to broadcast the NBA basketball league in the USA.
According to media reports, Apple is now also reaching out to Formula 1 for its streaming offering. A poker round with significant price increases would be expected. However, experts say that the difficulty is that the TV broadcasting rights for Formula 1 are awarded regionally and at different times, each country would have to be negotiated more or less individually and is therefore rather unattractive for a corporation alone.
How do the Formula 1 teams finance themselves?
The ten racing teams need a lot of money: An insider tells manager magazin that a team needs at least $400 million as a budget per year. The racing car alone costs millions in development, research and construction. Setting up a wind tunnel alone is said to cost more than $50 million. The cost of the complete chassis is still low at $500,000. Although the teams receive money from Liberty Media according to a set formula, only some teams’ costs are covered by this.
The teams keep a low profile about how much money the individual teams, which usually have between 500 and 1,500 employees, earn and spend. However, the Mercedes AMG Petronas F1 Team is considered the most profitable team. Despite a season without wins, the company came through Mercedes Benz Grand Prix Limited achieved record sales of the equivalent of $680.6 million in the 2023 financial year. No team in the history of Formula 1 has ever been able to earn so much. However, profits fell from $114 to $104 million.
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Most profitable team: Mercedes AMG Petronas F1 Team
Photo: Beautiful Sports / Erlhof / IMAGO
Figures from 2022 are available for the top team Red Bull Racing. Accordingly, the team brought in 341.69 million dollars, the profit after taxes amounted to 2.46 million. The majority of the additional income of $50 million compared to the previous year came from the Formula 1 prize fund and sponsorship, as Oracle was won as the new title sponsor in the corresponding season.
Other teams don’t allow themselves to be looked at the books more closely. However, 2021 data shows the win and loss of eight teams ranked in Great Britain have their headquarters. Ferrari and Alfa Romeo, on the other hand, are missing.
The numbers have likely changed significantly since 2021 due to the new budget regulations, says the auditor PWC. But Williams team boss James Vowles (44) emphasized recently
that not all ten teams are profitable. A further, eleventh team, as is currently being discussed, should not lead to a deterioration in the financial donations from Liberty Media to the teams.
How much is the prize money?
The so-called Concorde Agreement sets out the rules for Formula 1, which were agreed between the teams, the rights holders Liberty Media and the International Automobile Federation (FIA). It states that 50 percent of the profits from the allocation of Formula 1 rights flow into the prize money pot.
Accordingly, Liberty Media distributed a total of $1.215 billion in prize money to the teams for the 2023 season, which would mean the equivalent of $121.5 million per team. However, the actual amounts paid out depend on certain criteria such as placement in the constructors’ championship. The graduation is also set out in Formula 1’s Concorde Agreement. In addition, Ferrari has been receiving a bonus payment for years, which is said to amount to between 70 and 95 million euros per year, making Ferrari one of the teams that receive the highest donations from Liberty. A new agreement is due to come into effect in 2026 – then the Ferrari bonus could no longer apply. Prize money is one of the most important sources of income for the teams.
How much is a team worth?
The management consultancy PwC expects that the teams could earn billions in the next few years as part of a franchise system. This is a principle according to which various sports leagues in the USA such as the NBA, NFL and MLB are organized. In the sports context, franchising means that a league consists of permanent teams from the licensees.
Billions in revenue possible through franchising
“As long as the licensees can financially afford to participate, their teams remain an integral part of the league,” describes Thomas Gerlach, Advisory Partner at PwC Germany, to manager magazin. The characteristic is that there are no promotions or relegations for a fixed number of teams. The teams can be bought and sold along with the licenses, allowing ownership, location, name, logo, mascot and all other characteristics to change. What matters is the value at which a team is valued.
The PwC report goes on to say that before 2021, teams without generous sponsors and companies behind them were rarely able to play a significant role in the battle for the top spots while also being profitable. Teams with higher budgets could have brought in the best drivers, hired more engineers and delivered better racing performances. However, with the cost cap introduced from 2021, the situation for the smaller teams would have improved.
The sponsorship
As in previous years, experts count over 120 sponsors for Formula 1 and its teams for the 2024 season. Major partners of the championship include Aramco, MSC, Salesforce and Rolex. The teams also include Oracle, Petronas, Stake and Bybit.
“Individual contracts with the teams can amount to 20 to 50 million euros,” says the RTR Sports Marketing agency. At least those are the prices for them Title sponsors of the top teams
like Red Bull, Ferrari and Mercedes.
In addition to the title sponsors, there are numerous other sponsors. The Mercedes AMG Petronas team’s list also includes Ineos, Crowdstrike, TeamViewer, UBS, Snapdragon, G42, Akkodis. Hewlett Packard, Solera, Einhell, AMD, The Ritz Carlton, Sherwin Williams, Tommy Hilfiger, Puma, Pirelli, SAP and WhatsApp are also there. The sponsor lists for the other teams are similarly long.
Changes in sponsors are commonplace. From 2026, Team Sauber will also bear the name of the new owner. This season it will be racing on the track with title sponsors Kick and Stake. Aston Martin’s title sponsor Cognizant recently withdrew, and instead the team will appear under the name Aston Martin Aramco Formula One this season.
In addition to sponsorship, merchandising also contributes to the teams’ income. Experts also point out different technical services and data that are collected during the research and development of the cars and then offered to developers, designers and car manufacturers.
The cost cap and the million-dollar salary of the drivers
If you assume a required budget of 400 million dollars for a season, then this would include the salaries of employees as well as drivers, the development of the cars and travel costs. The more popular and successful the drivers, the larger the team, of course the higher the financial requirements.
To ensure that costs do not rise to the limit when it comes to the equipment of the cars, the FIA introduced a cost cap from 2021. The controversial regulation has been in effect since then, affecting all expenses related to the performance and operation of the vehicles. However, the cap does not include engine-related expenses, the salaries of the drivers and the three highest-paid employees, as well as the costs of travel and accommodation for the staff.
According to PwC, Red Bull F1 spent around $287 million on the development of the car in 2020, while the Haas F1 team invested $95 million. It is not yet known how much Red Bull will spend with world champion Verstappen this season. However, one can assume that the company will make full use of the given budget.
One thing is also certain: Verstappen is not only one of the top drivers, but also one of the top earners
The same can be assumed for the management, even if team boss Christian Horner is currently under public criticism because of MeToo allegations.
The entry fee
In order to be admitted to the Formula 1 races, the teams have to pay an entry fee to the FIA. The entry fee is divided into a basic amount, which is the same for everyone, and a fee which depends on how many points each team has collected in the previous season.
The base amount is at least $500,000. The higher the score, the more expensive the participation fee is in the following season. So Oracle had to Red Bull
Finally, as world champion in the constructors’ and drivers’ championships, he will pay a record sum of $7.45 million for the 2024 season. Mercedes had to pay $3.35 million, while the Williams team had to pay $842,000 and the Haas team “only” $737,000 to the FIA.