The formulamoney.com portal has published another review of the financial condition of the most prestigious racing series in the world - Formula 1. The report, compiled on the basis of various open sources (official data on capital flows in Formula 1 are published extremely rarely), states that this year the total income of the series due to the growth in revenues from television contracts and payments under promotional contracts of race organizers will be $1.789 billion versus $1.587 billion in 2010. And in 2012, Formula 1 will cross the $2 billion mark. The report’s authors are confident that in the future, income growth will not stop and in five years it will exceed $3 billion. Income from promotional contracts will grow especially quickly. Last year they brought in $568 million, but by the end of the decade a two- or even three-fold increase is expected. On average, countries now pay about $30 million for the right to host a race, but by 2020 there should be races that will cost their organizers $100 million annually. The Russian Grand Prix, whose debut is currently scheduled for 2014, has the chance to be the first to approach the hundred million mark (it is possible that due to the dissatisfaction of the International Olympic Committee, the race will have to be held in Sochi in 2015). According to the agreement, the Russian side will pay $59 million for the first Grand Prix. In the future, the price will increase by 10% every year. That is, over the seven years for which the contract is designed, payments under the promotional contract will amount to $550 million. This does not take into account the costs of purchasing rights to television broadcasts - from 2014 it will increase from the current $2.5 million to $11 million ($77 million over seven years) .

Such a significant increase in revenues from television and promotional contracts will most likely affect the income structure of Formula 1 teams. Currently, their main source of income is sponsorship agreements. But given that teams receive half of all revenue generated by Formula 1 (funds are distributed based on team performance), they are likely to be able to reduce their reliance on advertising deals as early as 2016. This is despite the fact that revenue from advertising itself is also growing. So, last year, sponsorship contracts brought teams a total of $802 million, and this year the contracts provide for the payment of $887 million. The report notes that in five years the winning team of the championship will receive at least $222 million, while in the past In 2018, bonuses from Red Bull, which became the strongest in the championship, amounted to only $87 million.

Alexander Petrov

Formula 1 is developing in billions of steps