https://sites.lsa.umich.edu/mje/2024/04/29/is-hosting-an-f1-race-financially-feasible/
Formula One: it is the pinnacle of motorsport, the highest and fastest form of it. The wealthiest individuals pay exorbitant amounts to watch it, the largest corporations vie for limited spots to sponsor it and team owners take on huge premiums to put their drivers behind the wheel. Despite all this, it still is a huge financial burden on the local governments and private track owners who team up to fund and host Formula One Grand Prix (Balla, 2023). Profits are not guaranteed and sometimes breaking even is considered lucky. So how is this even possible? How is success so hard in an industry pulling in so much money?
To answer that question, it is important to start at the beginning of the business operation track owners embark on in hosting. And from the beginning they are already losing money. If they do not already have one, they must design and build a track typically costing upwards of $270 million, with yearly maintenance fees averaging $18.5 million (Balla, 2023). Moreover, these costs do not even include the necessary track additions for races such as grandstands (~$14 million), safety barriers and fencing (~$8 million), race pits, offices, parking lots etc., (Sylt, 2017). But if miraculously, owners already have all this, they do not avoid paying up. After a track is in place and Liberty Media, the owner of Formula One, has completed its necessary track inspections, track hosts must pay a hosting/race promotion fee to Liberty Media. This fee must be paid for every single race hosted and is estimated to be between $15-50 million and upwards for prime time races like the Qatar Grand Prix towards the end of the season (Bodsworth, 2023).
So at this point everything should be finalized and Liberty Media should have its full profit, right? Unfortunately, no. Liberty Media continues to take more. All revenue from track sponsors and broadcasting rights for races goes to Liberty Media. And for the 2023 season, sponsorship revenue came out to $445 million (Cronin, 2023) while for the 2022 season (2023 results not in yet) broadcasting revenue came out to be $936 million (Agini, 2023; Cronin, 2023). So as unfortunate as it is, track owners are left with very little revenues from Grand Prix. Ticket revenues end up being their sole source of income, which in most cases is just not enough to be profitable.