Record Valuation For F1 In 2024

The combined valuation of the ten F1 teams has reached record heights in 2024, estimated at 231 billion dollars, testifying to the impressive growth and popularity of the sport in recent years, thanks in particular to the Netflix platform and its dedicated documentary series ‘Drive to Survive’, which has accumulated more than 5 million viewers per season. According to data analysed by the digital platform Sportico, Ferrari tops the list with an estimated valuation of 4.78 billion dollars, followed by Mercedes (3.94 billion) and Red Bull Racing (3.5 billion). All are now worth more than a billion dollars.

So it's no coincidence that the luxury sector is taking a keen interest in Formula 1, particularly since global giant LVMH announced last October that it would become a global partner of the circuits from 2025 for a 10-year period, with a financial commitment estimated at over $150 million a year. The latter replaces the current historical timekeeper Rolex, which Tag Heuer could probably replace.

In terms of revenue, the ten teams have each generated between $158 million (Williams) and $680 million for Mercedes in 2023, ahead of Ferrari ($619 million) which benefits from an additional bonus of several tens of millions of dollars due to its historic position in the sport (on the circuits since the creation of the F1 world championship in 1950). On the other hand, others such as Aston Martin, fifth in the rankings, and Williams, ranked seventh, are loss-making, with losses of $27 million and $100 million respectively. McLaren, fourth in the rankings, which posted a loss of $8 million in 2022, will make a profit of $38 million in 2023.

Sponsorship and trophies are the two primary sources of income for the teams. Most have around twenty sponsors with annual contract values ranging from 1 million to over 600 million dollars annually. These include Oracle at Red Bull, which has renewed its contract in 2022 for 500 million dollars for five seasons, and Petronas and IWC Schaffhausen at Mercedes. This summer, the Swiss watchmaker also announced its partnership with the highly-anticipated film ‘F1’, produced by Apple TV+ and scheduled for worldwide release on 25 June 2025, starring none other than Brad Pitt.

The American media group Liberty Media, the world's largest sports empire and owner of F1 since 2017, will generate sales of 3.22 billion dollars in 2023 from this activity alone. Revenues generated mainly from race promotion (29.3%), media rights (32.2%) and sponsorship fees (18%) - 38% of which were shared between the ten F1 teams for a total of 1.22 billion dollars in 2023, compared with 1.16 billion the previous year, report Sportico and Belgian media outlet L'Echo.

This distribution is organised in accordance with the ‘Concorde Agreements’ governing the sport and the Fédération Internationale de l'Automobile (FIA), Formula 1 Group and the FA teams, which are ratified every five years. It considers the previous year's constructors' standings and Formula 1 revenues for the current year: teams that have won the title and those that have finished in the top three over the last decade receive additional bonuses. The teams generate other revenues through licensing, merchandising and related activities.

With Formula 1 now attracting a more female (40% of the world's fans will be women by 2022, according to Forbes) and younger audience, and occupying the most strategic markets for luxury goods (notably the United States) with its Grand Prix events held all over the world, there is no doubt that luxury goods will continue to attract interest.