Business Daily – Formula 1’s New Business Model

BBC World Service | Aired: December 8, 2025

Host: Victoria Turner

Episode Overview

This episode delves into how Formula 1 (F1) has transformed itself from an elite European motorsport into a global entertainment brand, particularly focusing on its successful expansion into the US market, innovative commercial partnerships, and future business strategies. The discussion analyzes how F1 capitalized on media, sponsorship, and lifestyle branding while grappling with the challenge of balancing revenue growth and fan accessibility.

Key Discussion Points & Insights

1. Formula 1’s Global Expansion & US Breakthrough

• F1 as a Global Brand:
  Formula 1, long considered an exclusive and European-centric motor sport, has witnessed unprecedented commercial growth, branching out into non-traditional markets, most notably the United States.
  • Annual revenue reached $3.4 billion in the last year, marking four consecutive years of growth (02:53).
• US Market Penetration:
  • Expansion accelerated after Liberty Media, an American company, acquired F1 in 2017.
    • New US races: Miami Grand Prix (2022), Las Vegas Grand Prix (2023).
    • Fanbase soared from 34 million in 2018 to 45 million in 2024 (04:07).
    • “It’s incredible how much F1 has changed here in the States. The growth has been phenomenal.”
      — Elizabeth Blackstock, motorsports journalist [04:07]
• Pop Culture & Media Influence:
  • Strategic partnerships with Netflix (“Drive to Survive” series), Louis Vuitton, and LEGO.
  • F1 movie featuring Brad Pitt and Javier Bardem increased visibility.

2. The Role of Media and Sponsorship

• Media Rights & Revenue:
  • Media rights account for about a third of F1 revenue.
    • New Apple TV deal worth $750 million over five years (05:38).
• Sponsorship Shifts:
  • Sponsorships contribute 18% of revenue.
  • F1’s sponsorship model evolved from tobacco advertising to diversified global brands (Red Bull, KitKat, LEGO, DHL, McDonald’s).
  • “No one could deny the global reach of the sport, no one could deny its credentials in terms of technology and finding solutions… Just as one door closed, another door opened.”
    — David Coulthard, ex-F1 driver [06:24]
• Creative & Bespoke Partnerships:
  • F1 tailors deals to specific brands, making sponsorships more than just track logos.
  • Example: LEGO integrated into the Miami drivers' parade, not just via static branding (10:40).
• Brand Storytelling:
  • Partners like DHL highlight logistics, while McDonald’s engages younger fans in Latin America (11:25).

3. Barriers to Fan Access

• Ticket Price Controversies:
  • Soaring ticket/hotel costs, especially for US races like Las Vegas Grand Prix, have priced out many traditional fans.
    • “It’s not really even catering to a fan. It’s kind of catering to folks who want to be seen at an event.”
      — Elizabeth Blackstock [15:12]
    • “There were so many people I spoke to who were like, well, I would have loved to come… but I can’t afford hundreds and thousands of dollars” [15:12]
• F1’s Response:
  • F1 is adjusting ticketing models based on fan feedback and data to balance exclusivity with accessibility (16:18).
    • “So we’ve taken the learnings from previous years… we now know what people want to buy, and so we’re trending positively.”
      — Emily Prazer, Chief Commercial Officer, F1 [16:18]

4. Future Growth & Business Models

• Expansion to New Markets:
  • Efforts to return to Africa (South Africa bidding for a 2027 race).
  • Support from drivers for more diverse global reach.
    • “I would love to race in Africa… it’s one of the only continents we don’t actually do on the race calendar.”
      — Multiple drivers [14:18-14:44]
• Lifestyle & Hospitality:
  • Collaborations with luxury and lifestyle brands (Soho House, Lewis Hamilton private members clubs, Gordon Ramsay’s F1 Garage).
  • Focus on creating experiences that go beyond racing.
• Potential in Betting Markets:
  • F1 is cautiously exploring sports betting as a new revenue stream but remains deliberate due to regulatory complexity (16:54).
    • “We want to massively take our time… it’s for the best interests of engagement and fandom and not do something we will regret.”
      — Emily Prazer [16:54]
• Valuations & Investment:
  • F1 team valuations have skyrocketed from near-bankruptcy valuations (“teams sold for a pound”) to several billion dollars.
  • “A few years ago, teams being sold for a pound going out of business… now we see valuations of 2, 3, 4 billion.”
    — Liam Parker, F1 Chief Communications Officer [18:24]
  • Ambition to expand beyond traditional TV audiences and tap into untapped markets in China, India, and beyond.

Notable Quotes & Memorable Moments

• Elizabeth Blackstock on Drive to Survive:
  “Drive to Survive was… this perfect storm… people fell in love with it because it’s really cool, it’s aspirational, it’s fun, and… it feels special because it doesn’t happen here every weekend.” [04:40]

• David Coulthard on the Sponsorship Evolution:
  “No one could deny the global reach of the sport… finding solutions that will help us all in mobility in the future.” [06:24]

• Liam Parker on F1’s Scope:
  “We’re at 826 million fans that we would count as fans. We want to see that number go up. We want to make sure our TV audience continues to be there, but… we need to be thinking around the corner… platforms that serve fans that don’t always watch linear TV.” [18:24]

• Emily Prazer on New Revenue Streams:
  “We have new partnerships with the likes of Soho House and Lewis Hamilton to bring private members clubs to Formula 1 tracks… a partnership with Gordon Ramsay… all feeding into this lifestyle proposition.” [17:33]

Timestamps for Important Segments

• F1’s growth in the US – [01:27, 04:07, 04:31]
• Drive to Survive and media partnerships – [02:11, 04:40]
• Revenue and sponsorships – [05:38, 06:24, 10:40]
• Access and ticket pricing issues – [14:48, 15:12, 16:18]
• Future growth & business model innovations – [16:45, 16:54, 17:33, 18:24]
• Expansion to Africa and fan inclusion – [14:18, 14:44]

Conclusion

This episode provides a comprehensive look at the way Formula 1 has shifted from an elite, sponsor-driven sport to a global entertainment juggernaut, leveraging media, creative partnerships, and experiential offerings. The business model is still evolving, with F1 leadership keenly aware of the importance of maintaining competitive racing, expanding the fan base, and ensuring the sport remains aspirational yet accessible.

Key takeaway:
Formula 1’s future, while dependent on business innovation and expansion, ultimately rests on its ability to keep fans—old and new—engaged with the drama and spectacle of racing.