Liberty Media, the owner of Formula 1, has announced its profit figures for 2023, and it is immediately clear why there has been a significant investment in a piece of land in Las Vegas: revenues and therefore also profits have increased significantly, and the teams benefit from this myself too.
The weekend in Las Vegas was initially all about the show, and when the action finally got going, a loose manhole cover caused a lot of commotion and a broken Ferrari. Team boss Frédéric Vasseur was not amused when it became clear that the costs of the damage would not be reimbursed, and to top it all off, Carlos Sainz also received a grid penalty for changing engine elements. It led to a clash in the press conference when Toto Wolff severely lectured a journalist who criticized the race in Las Vegas.
Formula 1 gambles with Las Vegas
The figures also make it clear why Wolff, originally a businessman, was so positive about the event. In the financial report, Las Vegas is mentioned several times for its enormous financial growth in the fourth quarter of 2023. Liberty Media spent about $500 million on a piece of land on which a new pit complex was built, but that seems like a good investment to have been. Revenues in the latest quarter rose from $754 million in 2022 to $1.23 billion in 2023.
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This means that the last quarter also accounted for the largest increase in revenues on an annual basis. These rose from $2.57 billion to $3.22 billion, an increase of 25 percent. No less than 73 percent of the increased income came from the last quarter. The vast majority came from sponsorship, sales of television rights and entrance fees. Thanks to these higher revenues, profit figures also rose by no less than 64 percent year on year to $ 392 million.
Teams benefit, Ferrari especially happy
Under the Concorde Agreement, $1.215 billion will be paid to the ten teams, an increase of five percent compared to the previous year, and an average of more than $120 million per team. The amount paid out is determined per team based on a distribution key. Performance plays a role in this, but also how long a team has been active in Formula 1, and what results teams have achieved in the past.
The top earner is not constructors’ champion Red Bull Racing, but Ferrari, because the Italian team has been involved since 1950, at the start of the world championship, and therefore receives a bonus under the current Concorde Agreement. That bonus will be one of the much-discussed points of discussion in the 2026 Concorde Agreement. The percentage of the oldest Formula 1 team now increases as total revenue increases.
The legendary brand will receive no less than 208 million dollars, while Max Verstappen’s employer can add 184 million dollars, just a little more than Mercedes’ 179 million dollars. The rest will receive significantly less, with Alpine, Stake, and Haas being the only teams to receive less than in 2022.
|
Team |
2022 revenue (millions of $) |
2023 revenue (millions of $) |
|
Ferrari |
200 |
208 |
|
Red Bull Racing |
169 |
184 |
|
Mercedes |
156 |
179 |
|
McLaren |
112 |
117 |
|
Alpine |
112 |
105 |
|
Aston Martin |
82 |
101 |
|
Williams |
80 |
97 |
|
Visa Cash App RB |
73 |
80 |
|
Stake F1 |
92 |
74 |
|
Hare |
78 |
70 |
Teams financially healthy
With a budget ceiling of $135 million in 2024, it is logical that the teams are now in good financial shape. However, there are many costs that are not covered by the budget ceiling. For example, Mercedes announced in October that the total costs for 2022 were $447 million. This means that approximately forty percent of the total costs are covered by the prize money. The sponsorship money for most teams is still a lot higher than the prize money, which means that all teams are now financially healthy.
