Formula 1 saw some significant changes in the 2022 and 2023 seasons, with both featuring 22 rounds each. The addition of the first F1-promoted street event in Las Vegas and the Qatar GP to the calendar brought about a different mix of races. Unfortunately, France disappeared from the calendar, and the Imola event, which was supposed to be the 23rd race in 2023, was canceled due to freak weather. These alterations in the race calendar had a direct impact on the financial outcomes for the sport.
The financial performance of Formula 1 showed a positive trend during these two seasons. Year-on-year revenue rose by 25%, increasing from $2.573 billion to $3.222 billion. Operating profit also saw a significant increase, going up by 64% from $239 million to $392 million. The total payments shared between the 10 teams increased from $1.157 billion to $1.215 billion, showing a growth rate of 5%. These figures indicate a robust financial performance for Formula 1 during this period.
The rise in income for Formula 1 was attributed to various factors. Race promotion revenue saw growth primarily due to ticketing revenue from the inaugural Las Vegas GP and other contractual fee increases. Sponsorship revenue also increased, with income from new sponsors and growth in revenue from existing sponsors. The introduction of new races and events played a significant role in boosting revenue for the sport.
While revenue showed an upward trend, Formula 1 also experienced increased costs during these seasons. Higher expenses were driven by the costs of promoting, organizing, and delivering the Las Vegas GP, as well as elevated hospitality costs at other events. Selling, general, and administrative expenses also increased due to higher personnel, IT, and marketing costs, along with expenses associated with planning and running the Las Vegas GP. Despite cost management efforts, the sport had to make additional investments.
CEO’s Perspective
Formula 1 CEO Stefano Domenicali expressed satisfaction with the performance of the sport during these seasons. He highlighted the strong engagement across all platforms, record race attendance, and F1 maintaining its position as the fastest-growing league on social media for the fourth consecutive year. Domenicali also emphasized the growth of fan base, especially in the US market, fueled by the success of the Las Vegas GP. Sustainability initiatives remained a priority for Formula 1, and partnerships were formed to promote these initiatives.
Overall, the financial success of Formula 1 in 2022 and 2023 was marked by revenue growth, increased operating profit, and enhanced engagement with fans. The addition of new races and events, alongside effective cost management strategies, contributed to the positive outcomes for the sport. Despite facing challenges such as weather-related cancellations and increased costs, Formula 1 demonstrated resilience and adaptability in navigating the evolving landscape of the racing world. With a focus on sustainability and fan engagement, the sport looks poised for continued growth and success in the future.
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