F1 is one of the most popular sports in the world. A few years back, the commercial rights for the sport were bought by an American-based company called, Liberty Media. Since then, the sport has undergone a lot of changes and has gained a lot in value.
Liberty Media was established as a mass media company in 1991. Since then, they have made several investments in various companies. But one of their biggest investment stands to be Formula 1 which was purchased in 2017.
How has Liberty Media contributed to F1’s growth
Until 2017, F1’s commercial rights were held by various companies. In 1987 Bernie Ecclestone saw the value F1 had and set up the Formula One Promotions and Administration (FOPA). FOPA helped Bernie Eccleston earn billions of dollars. However, as time went by, Eccelstone slowly sold shares of the company.
In 2017, Liberty Media stepped up to purchase a controlling interest in F1. It has been reported that the Mass Media Company paid approximately $4 billion for this. However, the company only spent $301 million of its own money. Since then, Liberty Media has taken several measures to promote F1. One of their biggest moves was to start the Drive to Survive series with Netflix from the 2018 season.
Liberty Media to buy Formula One in $4.4 billion deal: https://t.co/FbdKwxlRBV pic.twitter.com/9MhExuAuYf
— Reuters Business (@ReutersBiz) September 7, 2016
Netflix’s Drive to Survive series has done a lot for the sport. It has attracted new fans from all over the world, especially in the US. This has quadrupled the value of the commercial rights for the sport. F1 introduced its new CEO, Stefano Domenicali in 2020.
With his assistance, the sport has made several changes including the introduction of Sprint Races. While some of these decisions were controversial, the sport has continued on with them. As of 2023, it is speculated that the commercial rights owned by Liberty Media are worth around $20 billion.
How Liberty Media has increased the value of F1
since purchasing the commercial rights to F1, Liberty Media has taken measures to increase the value of F1. As mentioned above, starting the Drive to Survive series was one of those steps. F1 already has a very wide fanbase in Europe and Asia. However, the fanbase in the US is comparatively low.
Since 2018, F1 has tripled the number of races in the US. The Fan-favorite, COTA still stays on the calendar. Apart from this, two more races have been added in Miami and Las Vegas. This is an attempt by F1 to increase the number of fans from the US.
Formula 1 was acquired by Liberty Media for $4.4 billion in 2016, and it’s now one of the fastest-growing sports globally.
They are up billions of dollars on the investment already, and it’s one of the best case studies in business.
Here’s the story 👇 pic.twitter.com/hwZTOm48tX
— Joe Pompliano (@JoePompliano) May 8, 2022
Formula 1 also started hosting Sprint races from the 2021 season. The ratings during that season were one of the best in the sport’s history. Granted, most of it was because of the Championship battle between Max Verstappen and Lewis Hamilton. However, the sprint races continue to be held to date.
There is some debate regarding the format of the Sprint, but at the moment, F1 is still experimenting to find out what works and what doesn’t. It is safe to assume that Liberty Media will take steps to further increase the value of the sport.