Formula One Group: The Business Of The World's Fastest Sport
Initiating equity research coverage
Formula One (F1) is a severely undercovered name given the massive global reach and popularity of the sport. F1 is not only the fastest motorsport in the world, but it is also the fastest-growing major sport in the world. In addition, Formula One Group has recently acquired the thrilling MotoGP, which is the highest class of motorcycle racing. F1 cars are technological marvels that have served to push the boundaries and frontier of what cars are capable of for 75 years.
Both F1 and MotoGP race across the globe, visiting a vast amount of geographies throughout the race calendar. The average American investor may not know that F1 is among the top five viewed sports in the world, with 1.6 billion cumulative TV viewers in 2024 across a fan base of 826 million.
Photograph: Ferrari’s crowd during the Italian Grand Prix in 2024
Company profile
September 24, 2025 Initiated coverage
Direction: Buy
Previous fair intrinsic value: N/A, as of N/A
Symbol: FWONK, Exchange: NASDAQ
Sector: Communication Services, Industry: Entertainment
Theme: Motorsports
Fair intrinsic value: $113.44 (10.07%), as of September 24, 2025
Market capitalization: $25 971 million
Pricing data: P/S 6.72x, P/E 95.13x
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The economics of Formula One
F1 and MotoGP share characteristics in their revenue build and have similar economics, which also means that they share the same strengths and weaknesses.
F1 is the most exclusive sport in the world in terms of required capital to compete. It is reserved for the extraordinarily talented and wealthy, as the estimated cost to reach Formula One is between $7 and $15 million.
There are only 20 available seats for competing drivers, two per team (will be increased to 22 in 2026, as Cadillac enters the grid). This means that acquiring a seat for an up-and-coming driver is extraordinarily difficult and exclusive, and the path towards that seat is not cheap. F1 drivers typically follow the following path, using the current grid as a reference:
Karting, 7 years
Formula 4, ~1 year
Formula Regional, ~2 years
Formula 3, ~2 years
Formula 2, ~1 year
Figure 1: Estimated annual costs per racing category
Combining the estimated annual costs per racing category with the referenced years spent per category, the sum across all categories is $7.2 million. However, this is for the drivers who actually made it all the way to F1 and spent only 1 season in F2 on average. To show the brutal economics of competing drivers, the 2024 F2 grid had spent on average $5.7 million in F2 alone, not accounting for lower formulas, and many of 2024’s grid are still stuck in F2 in 2025 (the rest changed categories or retired). It is not uncommon for money to run out before drivers even manage to reach F2, as each cumulative year stuck in lower formulas compounds for those who are unable to find sponsorship.
F1 is an outlier amongst the most viewed sports in the world considering its immensely high barrier to entry. Every other sport in the top is easy to pick up and compete in on a global scale and does not feature the same exclusivity. Examples include football (soccer), basketball, tennis, and baseball. This implies that the entertainment value has to remain consistently high, as the fanbase lacks personal experience and only has legacy and current sports to relate to.
F1’s revenue is divided primarily into three segments:
Race promotion
Contract sales that grant the promoter (circuit owners, government bodies, and event organizers) permission to host, stage, and promote each Grand Prix (circuit specific).
Media rights
F1 licenses rights to broadcast Grand Prix on television and other platforms, as well as F1 TV subscription fees.
Sponsorship
Event-based sponsorship, including trackside advertising and race title sponsorship packages. Includes seasonal partnerships.
Corporate
Shipment of cars and equipment across events, ticket sales to the Paddock Club, support races at Grand Prix, as well as various television production activities.
Figure 2: F1 segmented revenues (Note: the pandemic compromised ‘20 and partially ‘21-23)
The business itself is very capital light, which I will touch more on while looking at the profitability. A capital-light business implies high margins, but in F1’s case, it is due to their inability to affect their revenue streams. That is a core strength but also a weakness of the business model.
Since F1 is comprised of 10 (soon 11) constructors (teams), the viewership attention centers on the constructors and their drivers. Similarly to how the NBA, NHL, and MLB are only as popular as their star players and teams. However, there are core aspects of the viewership experience that Formula One Group directly impacts.
The term “formula” in F1 refers to the set of technical and sporting regulations that all constructors and cars follow and is governed by the FIA (Fédération Internationale de l’Automobile). Formulas change over time, with the next set of regulations being implemented in 2026. The regulations directly shape the viewership experience, as altering the aerodynamic rules, weight limits, engine formulas, and more directly impacts all aspects of racing:
Car speeds
Grip levels
Overtaking
Reliability
Field spread
Race format
Strategy variety
Formula One Group simply sells the show and has to rely on the regulatory body, as well as the commercial interests of each competing constructor, to be as competitive and popular (with fans) as possible.
Figure 3: Cumulative TV viewership of F1
Simply looking at cumulative TV viewership, it appears as if Formula One is losing steam and that the product is becoming less attractive over time. However, it is important to account for all measures of popularity. For example, while TV viewership was a good measuring stick 10 years ago, TV is now a dated platform compared to the rise of streaming platforms. F1 has its own streaming platform, F1 TV, which has shown impressive growth. Many of the media rights owners also offer the Grand Prix through streaming platforms, but due to lack of disclosures, I can’t aggregate an accurate number.
Figure 4: F1 TV average active subscribers (FY2024 as of Q3)
Attending the actual Grand Prix is a very expensive viewing experience and often requires international travel, hotel costs, and hefty entrance fees. However, by looking at in-person attendance, F1 appears to be more attractive than ever, with 6.5 million in-person attendances in 2024.
Figure 5: Total Grand Prix in-person fan attendance
Another more straightforward approach to gauging interest in the sport is the social media following that Formula One has. In particular, during the periods when TV viewership was peaking, the actual fanbase was not engaging online. Instead, there is exponential growth after the pandemic, and it is not slowing down.
Figure 6: F1 social media following approximations
The question then becomes, what actually happened during the pandemic that caused a massive surge of interest in Formula One? F1 has had a very passionate following for many decades, but the following could be considered legacy in a way. There was not a huge influx of new fans to the sport, as there simply was no catalyst to draw new interest. That changed in 2019, as Netflix premiered the first season of the documentary “Drive to Survive,” which follows various constructors and drivers throughout a season of F1. Season 2 of DTS came out just in time when everyone was sitting at home during the pandemic, and it completely changed the landscape for the sport.
The explosive growth of F1
In the 2024 investor day presentation, Formula One Group shared some shocking figures in relation to the growth in fanbase.
One-third of all fans started following F1 in the last 4 years.
One-third of all TV viewers are under the age of 35.
This relates to the previously mentioned legacy fanbase.
42% of the fanbase are female
The number of female visitors to F1.com has grown 4x in 2023 compared to 2018.
As of Q3 2024, the following was also true for Drive to Survive:
800 million global cumulative views for the show (seasons 1-6)
88% of fans said that DTS increased their interest in F1.
~90% of season 5 viewers watched at least 6 Grand Prix live in 2022, compared to 51% among total F1 fans.
43% of season 5 viewers were female.
Figure 7: Drive to Survive cumulative weekly views (weeks 1, 2)
The above chart may seem alarming at first, but the diminishing viewership is not at all unusual considering the show is up to its 7th season. In regard to show viewership as a whole, new viewers often start with season 1, which makes it natural that the cumulative views at the launch of a hyped and marketed new season see less and less cumulative views at launch. On the flip side, having such a strong core audience that views a new annual season in millions the first week is a strong result.
The interest in DTS made Apple confident in producing the movie F1, which was released on June 27th, and it became Apple’s highest-grossing film ever. The movie stars Brad Pitt and was produced by 7-time F1 champion and current Ferrari driver Lewis Hamilton. The movie kept it as authentic as possible, having Brad Pitt and his co-star drive a modified F2 car on real circuits during F1 race weekends in front of actual F1 crowds. The movie saw global box office sales of over $500 million in its first 5 weeks and generated 20 billion social media impressions, which represents more than 100% growth over the same period in the year prior.
This ultimately ties back into core revenue and cash generation for the business. The goal is to find a way to expand the viewership of F1, which has historically been largely concentrated in Europe. A Netflix show and blockbuster movie aim to capture a new demographic: the U.S. market.
Figure 8: Average U.S. linear TV viewership
The pandemic served as a catalyst to catapult U.S. interest in F1 through Netflix, and the Formula One Group has managed to properly catch and ride the wave, continuously engaging and driving growth. As of Q2 2025, live viewership is up 7% Y/Y in the U.S., with ESPN setting record viewership for 7 races. The in-person audience viewership for the sprint race in the Miami Grand Prix was up 25% Y/Y, attracting the largest U.S. audience for a sprint race since the format was introduced in 2021. Social media followers reached 106 million, showcasing 20% Y/Y growth, and it is the single fastest-growing major sport on social media.
Nielsen reported the American fan base grew over 10% to 52 million fans in 2024, and the U.S. remain our largest market on social. We continue to focus on securing the ideal partner to support our broader commercial strategy for continued growth in the U.S. market.
Stefano Domenicali, Chief Executive Officer
Liberty Media Corporation, Q2 2025 Earnings Conference Call
The U.S. has the most Grand Prix out of any hosting nation currently with a total of 3 (Austin, Miami, and Las Vegas). This further shows F1’s ambition to grow the popularity in this new vertical.
The massive surge in popularity across all markets, but in particular in the U.S., serves as a huge revenue driver. As Formula One Group’s revenue drivers are largely tied to the attractiveness of the sport. Each reportable segment is a self-empowering flywheel, where popularity drives sponsorships and partnerships, drives up media rights licensing, and boosts revenue from race promotion because hosting a Grand Prix becomes more attractive. The popularity drives more growth across each segment, which in turn drives a better show and viewing experience for the viewer, further boosting popularity and interest in the sport.