Credits: IMAGO ZUMA Wire
Since the advent of the hit Netflix docuseries ‘Drive to Survive,’ Formula 1’s stock has risen exponentially in the global markets. This has coincided with Liberty Media’s takeover of the sport from ex-ringleader, Bernie Ecclestone. And as 2023 came to a close, the sport recorded its biggest win yet in the Liberty Media era. The sport’s commercial rights holders have reported its revenue and it has gone on to break the all-time record. According to Auto Motor und Sport (as quoted on X (formerly Twitter)), “Formula 1 reports record revenues of $3.222 billion. $1.215 billion will be distributed to the teams. This is more in absolute numbers and less in percentage terms than in the previous year [$2.573 billion].”
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Broadcast rights, sponsorship income, and entry fees accounted for almost $2.560 billion for Liberty Media last year. The remaining $662 million can be attributed to revenue generated from the Paddock Club, Hospitality and F1 Experiences tickets and freight as per the AMuS report. What’s more, the inaugural Las Vegas GP has also been cited as one of the driving factors for the increase in revenue last year.
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While the sport has benefitted massively, the 10 teams have done, too. As per the prize distribution matrix, there has been an increase of 5% from last year’s payout. This year, the teams will get a slice of the pie out of $1.215 billion as compared to last year’s $1.157 billion. However, despite this increase, the teams are reportedly discontent with the financial stipulations of the latest Concorde Agreement.
Despite record-breaking financial success, F1 teams are unhappy with Liberty Media
Under the current Concorde Agreement, the team will get 63% of the total sales revenue generated. This is a hefty 3% decrease from what they were entitled to previously. Hence, while the sport has prospered, the teams are unhappy about how their share has seemingly gone down.
Despite their dominance, Red Bull do not take away the biggest slice of the pie. The distribution calculations are based on a lot other parameters. For instance, Ferrari is entitled to a legacy bonus owing to their presence in the sport from the very inception in 1950. This means that they still remain the highest earning team in the game with an estimated $8 million increase as compared to last year.
Red Bull are set to earn around $184 million as compared to their previous income of $169 million, whilst Mercedes see a $23 million increase in their payout with a staggering $179 million potentially in the bank this year.
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McLaren are set to receive $117 million as compared to their previous payout of $112 million.
