Pictured: Brad Pitt, star of the upcoming Formula One based movie. The film is produced by Apple and … More
The media rights agreement for Formula One (F1) racing in the U.S. is up for renewal. The current agreement with ESPN expires after the 2025 season. At present, ESPN is ponying up between $75 million to $90 million a year in a deal begun in 2023. There are reports that Liberty Media, the parent company, is seeking between $150 million to $180 million per annum, a sizable increase in rights fees.
ESPN has held the U.S. media rights for F1 since 2018, when NBC Sports opted out of a $4 million licensing pact. At the time, F1 had announced plans to launch their own streaming service F1 TV. (NBC had televised F1 racing from 2013 to 2017.) Initially, ESPN had acquired the media rights at no cost. In 2020 with F1’s popularity growing, ESPN agreed to pay $5 million a year through 2022. Earlier this year, ESPN’s exclusive negotiating window with F1 expired, although they are reportedly having discussions.
Earlier this year, ESPN, which is launching a stanalone streaming service later this year, opted out of their current agreement with MLB. The cable network had been televising games since 1990. ESPN deemed the $550 million a year they were paying was too steep compared to other MLB media deals. Last year, ESPN agreed to an 11-year renewal agreement with the NBA at $2.8 billion a year. To air NFL games, ESPN is paying $2.7 billion each year. Ampere Analysis, a research company, reports a fair value for annual media rights for F1 racing in the U.S. is just over $100 million.
The F1 media rights pale in comparison to NASCAR. In December 2023, NASCAR announced a new 7-year $7.7 billion agreement with NBC, Fox, Warner Bros Discovery and Amazon. The agreement started this year running through 2031. This marked a +40% increase over the previous media rights agreement. Last June, IndyCar announced they had reached a multiyear agreement with Fox Sports. It has been reported the deal is worth about $25 million annually, an increase from the previous deal of $20 million NBC Sports paid.
Since 2018, the average audience for F1 racing on ESPN has grown but has begun to flatten out of late. In 2018, F1 races averaged 554,000 viewers, increasing to 1.2 million in 2022 (when ESPN signed its last agreement). In 2023 the average audience declined to 1.1 million viewers. Last year F1 averaged 1.12 million viewers. (One reason for the lower ratings compared to other sports, is live F1 races are held worldwide and often air in the U.S. in the overnight or early morning hours.) By comparison in 2024 NASCAR races averaged nearly 2.9 million viewers.
Liberty Media acquired Formula One racing in 2017 for $4.4 billion and the popularity of the sport has increased significantly. In 2024 Formula One’s annual revenue reached $3.65 billion, marking the fourth straight year (post-pandemic) of revenue growth and a year-over-year increase of +14%.
Liberty Media has made a concerted effort to attract more younger fans and more female fans with the use of social media among other marketing strategies. In addition, Liberty Media has added more races in the U.S. This year there will be F1 races held in Miami, Austin and Las Vegas.
Helping to popularize the sport in the U.S. has been the Netflix series Drive to Survive. The series debuted in 2019 and recently began in its seventh season. The series has been credited with attracting younger fans to F1. Also, on June 27, the feature film F1 starring Brad Pitt will be released. The film was produced by Apple and distributed in movie theaters by Warner Bros. F1 is hopeful the film will help grow the sport’s popularity.
In the event ESPN passes on F1 racing, there are several other media outlets that may be willing to sign a rights deal although no announcement is imminent. These include such streamers as Netflix, Amazon and Apple. Besides streaming Drive to Survive, Netflix has also recently begun to stream live sports including NFL games on Christmas Day and the FIFA Women’s World Cup in 2027 and 2031 (in the U.S.). Ampere Analysis reports 75% of self-identified F1 fans in the U.S. are Netflix subscribers. Hence, adding F1 would not necessarily add new subscribers to the streaming platform.
Later this year Amazon will begin streaming NBA and WNBA games to join their live coverage of NFL Thursday Night Football, NWSL and NASCAR. Besides producing the F1 film, Apple streams MLS matches and Friday night MLB games. Other potential suitors include Fox, NBC and Warner Bros Discovery. There are reports that these media outlets are “lukewarm” about picking up the rights to F1 racing.
Rights fees are not the only revenue source of Formula One, similar to worldwide sporting events such as The Olympics and FIFA World Cup, F1 has an impressive roster of global sponsorship deals including; Heineken, MSC Cruises, Pirelli, Qatar Airways, Crypto.com, American Express, Mattel and Nestlé among others.
Last October, the LVMH Group signed a ten-year $1.5 billion global sponsorship agreement with Formula One, among the brands involved Louis Vuitton, Moët Hennessy, and TAG Heuer. This year F1’s total sponsorship deals are estimated to be $2.9 billion.