In Formula 1, Formula1, Sport Sponsorship, Sports Marketing

Formula One, a pinnacle of motorsport, has been experiencing an extraordinary surge in economic growth in recent years. This article delves into the factors that have contributed to this unparalleled success and the transformation of F1 into a multibillion-dollar industry. From increasing popularity to innovative technological advancements, the sport has reached new heights, boosting revenues, attracting sponsors, and captivating audiences worldwide.

The Soaring Popularity of Formula One

F1’s popularity has soared to unprecedented levels, and this can be attributed to various factors. In 2022 alone, the sport generated a staggering $2.57 billion in revenue, which can be largely credited to record attendance and viewership. Overcoming the ‘un-American’ stigma, F1’s appeal has expanded to the American market with races in cities like Austin, Miami, and Las Vegas, significantly contributing to the American economy.

The Unprecedented Economic Growth of Formula One Teams: Unraveling the Factors Behind the Soaring Success, RTR Sports

Sponsorships: The Financial Backbone of F1 Teams

One of the primary revenue sources for F1 teams comes from sponsorships, which have seen exponential growth in recent years. From 2010 to 2018, F1 sponsors invested a whopping $17.8 billion, with Ferrari securing 11.8% of this sponsorship revenue. The sponsorship deals can range from low six-figures to over $60 million annually for title sponsorships, depending on the team’s brand strength and on-track performance. This influx of sponsorships has not only fueled financial stability for teams but has also intensified the competition on the track.*

Celebrity Investments and Their Impact

The rising popularity and promising future of F1 have captured the attention of influential celebrities, leading to significant investments in the sport. Personalities like Ryan Reynolds and Michael B. Jordan have shown their interest and involvement in F1, signaling potential growth and attracting further attention to the sport. These celebrity investments have not only provided financial backing but have also amplified the sport’s global appeal and reach.

Financial Sustainability Through Budget Caps

The introduction of budget caps in recent years has brought a new dimension to F1’s financial landscape. These caps have played a crucial role in ensuring financial sustainability for teams, encouraging responsible spending, and fostering a more level playing field.

The rising tide of revenues have let teams relish the benefits of the budget cap of US$135 million for 2023.
The financial fair play has injected more profitability into the sport1, as a result, the average value of F1 teams has witnessed an astonishing growth.

Formula 1 sponsorship cost

The Meteoric Rise in Formula One Team Valuations

According to the latest figures, the average value of a Formula One team has blasted off, registering a jaw-dropping increase of 276% since 2019 to reach a staggering US$1.88 billion. It’s not just impressive, it’s downright astounding, bearing witness to the sport’s escalating popularity and solid business potential.

At the forefront of this financial race are Ferrari and Mercedes, both standing tall with valuations around a whopping US$3.9 billion and US$3.8 billion respectively. Mercedes even manages to edge out Ferrari in the 2023 revenue projections with an estimated US$700 million.*

What about the others? There are no small teams!

Trailing close behind the leaders, but not to be outdone, are Red Bull and McLaren, each showcasing valuations north of the esteemed US$2 billion mark. Their revenues for 2023 are slated to touch US$510 million and US$490 million respectively. Others cruising in this billion-dollar club are Aston Martin, Alpine, and AlphaTauri.
Even those at the lower end of the spectrum, like Alfa Romeo, Haas, and Williams, hold significant worth, with each valued in the hundreds of millions.*

The Impact of Strategic Stake Acquisitions

The landscape of F1’s economic growth wouldn’t be complete without a mention of strategic stake acquisitions. Audi’s game-changing move to acquire a 75% stake in Sauber fueled this accelerating growth, almost doubling a previous offer and setting a new benchmark in the sport’s financial dealings.

Media Rights and Their Growing Significance: A Catalyst for Higher Valuations

What’s driving these soaring valuations? One key accelerator is the boom in global viewership. In 2022, an average of 70 million people per race were glued to their screens. Just to give you an example,  the US, a prime target market, has also yielded significant results, with viewership shooting up by 36% year-on-year to an average of 1.2 million per race in 20221*

So the proliferation of media rights has significantly contributed to the financial growth of Formula1. The value of media rights is projected to reach a staggering $1.4 billion by 2029. The collaboration between F1 and Live Nation has further bolstered its revenue stream, creating a win-win situation for both parties involved. This alliance is set to scale new peaks with the Las Vegas Grand Prix, and ticketing and hospitality-related revenue projections show a potential to rake in around US$500 million. The increasing demand for F1 content and the sport’s captivating nature have made media rights an even more lucrative aspect of the business.

Expanding and Diversifying the F1 Schedule

To maintain its upward trajectory, F1 has taken strategic steps to expand and diversify its schedule. Initiatives like introducing six sprint races, hosting a night race in Las Vegas, and launching an all-female development category aim to enhance viewership and attract a wider audience base. It is projected that these endeavors will generate a substantial $360.5 million in sponsorship revenue from 20 brand partners during the 2023 season.

Technological Advancements Driving Growth

F1’s journey from its inception in 1950 to its current multibillion-dollar status has been underpinned by continuous technological advancements. Innovations in aerodynamics and electronics have not only enhanced the performance of the cars but have also driven broader technological progress, benefiting society as a whole. F1’s commitment to competitiveness has spurred manufacturers and engineers to push the boundaries of innovation, leading to breakthroughs that extend far beyond the race track.

The Ripple Effects of F1’s Economic Growth

The flourishing F1 ecosystem not only benefits the teams and the motorsport industry but also has ripple effects that extend to various sectors. The sport’s economic growth has created numerous employment opportunities, from skilled engineers to support staff, both on and off the track. Furthermore, F1 races attract thousands of spectators from around the globe, boosting tourism and stimulating local economies. The hospitality, transportation, and entertainment industries all reap rewards from F1 events.


In conclusion, the unprecedented economic growth of Formula One teams in recent years can be attributed to a perfect blend of various contributing factors. The sport’s increasing popularity, boosted by record attendance and viewership, has paved the way for expanding revenue sources, especially in the American market. Sponsorships have emerged as the primary financial backbone of F1 teams, attracting significant investments and fostering fierce on-track competition.

The introduction of budget caps has further solidified F1’s financial sustainability, leading to a remarkable surge in team values. The value of media rights has also witnessed exponential growth, as F1’s captivating content continues to mesmerize audiences worldwide. F1’s expansion and diversification of the schedule, coupled with continuous technological advancements, have helped the sport maintain its status as a multibillion-dollar industry hosting from 2024, 24 thrilling races annually.

The ripple effects of F1’s economic growth are far-reaching, providing employment opportunities, stimulating tourism, and benefiting various industries associated with the sport. With the right mix of business acumen, innovation, and captivating racing action, F1 has charted a course for unparalleled success, cementing its place as a global sporting and economic powerhouse.

While waiting for the new Brad Pitt’s movie about Formula 1 and curious about the impact in term of popularity that the movie could have on the world wide audience, we can fasten our belts , for Formula One’s journey of growth and success shows no signs of slowing down!





Can we help you sign your best sponsorship deal?

Riccardo Tafà
Riccardo Tafà
Managing Director for RTR Sports, Riccardo graduated in law at the University of Bologna. He began his career in London in PR, then started working in two and four-wheelers. A brief move to Monaco followed before returning to Italy. There he founded RTR, first a consulting firm and then a sports marketing company which, eventually, he moved back to London.
Recent Posts

Leave a Comment

social media racing