How Formula 1 Makes Money: A Complete Business Breakdown Before The 2026 Season
Today's newsletter is a 3,000-word state of the union style address breaking down everything going on with Formula 1's business just days before the 2026 season begins.
Liberty Media released its 2025 earnings report for Formula 1 last week, with the world’s most popular racing series setting new financial records across the board.
Formula 1’s top-line revenue increased 14%, from $3.41 billion in 2024 to $3.87 billion in 2025. Operating income jumped by twice as much, from $492 million in 2024 to $632 million in 2025. And with Formula 1 equity now trading at $90/share, the same asset that Liberty Media purchased for an enterprise value of $8 billion in 2017 is now worth more than $26 billion, representing a 16% annualized return.
What Liberty Media has accomplished with Formula 1 is incredible. The same sport that was losing millions of viewers per year pre-acquisition has now created the modern media playbook that every sports league is trying to copy. However, what everyone fails to understand is that Formula 1’s growth story is far from over.
Formula 1 is about to embark on its most important season ever. Starting this weekend in Melbourne, Formula 1 will introduce new regulations (think: cars), a new U.S. media rights deal with Apple TV, an 11th team (Cadillac), and a new Concorde Agreement that changes the economics for commercial rights holders.
So for today’s newsletter, we’re doing a full breakdown of Formula 1’s business heading into the 2026 season. We’ll start by discussing how Liberty Media turned Formula 1 into a subscription business. Then we’ll get into the details, including why the Apple TV deal is better than people think, what Cadillac has done to prepare for its first season (hint: they are burning $30 million per month), how Liberty Media is leveraging its Las Vegas real estate to make an extra $33 million per year, and why the MotoGP acquisition could be another major growth engine.
Even if you don’t watch Formula 1, this is a case study that everyone should care about. There is a reason why this is one of our most popular newsletters every year. Pretty much every equity analyst agrees that the stock will go higher from here, with a consensus price target of $112 (implying 24% upside), mainly because Liberty Media has built a system that virtually guarantees future revenue growth.