Race hosting fees propel F1 income to $1.7bn

2011 F1 season

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Rubens Barrichello, Williams, Abu Dhabi, 2010

Formula One Group will generate $1.789bn in revenue this year, according to research from Formula Money.

Race hosting fees, which were worth $568m last year, are expected to be the largest source of growth.

The highest individual race hosting fee is $50m. Formula Money predicts this will reach $100m by the end of the decade.

Formula One Group’s income is projected to exceed $2bn next year and reach $3.253bn by 2016.

This would increase the prize money handed to the teams, which share 50% of the sport’s income between them.

It could prove especially valuable as Formula Money reports total team sponsorship and supplier deals fell for the fourth time in five years in 2010, to $802m. However they report signs of an upswing this year with sponsorship already worth more than it was last year, hitting $887m.

2011 F1 season

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Image © Williams/LAT

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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23 comments on “Race hosting fees propel F1 income to $1.7bn”

  1. The best motivation for the Bahrain GP it is then! But I think the teams and FIA should look at the sense in increasing it like this.

    There is not much into increasing the amount of races. TV stations are not going to pay a lot more and going higher with the race fees is not the way to go.

    Merchandise might be a way to go. And downloadable content would be an enormous boost in my mind. But that is it.

    1. Rescheduling the Bahrain GP will have nothing to do with money. http://www.guardian.co.uk/sport/2011/jun/03/bernie-ecclestone-bahrain-grand-prix

      1. Yeah, well … Bernie would say so, wouldn’t he. Weather we believe a word of that is a different matter altogether.

  2. The worst part is that the tracks don’t have any way to recover costs except through tickets, right? If race hosting fees are this high, FOM needs to give up a few more revenue streams to the circuit owners, say track-side advertising.

    Also, money that goes into hosting fees is money that is not spent on improving facilities, improving access roads or other allied activities connected to racing. And then Bernie pulls the plug on older circuits because they’re not good enough.

    1. Time for FOTA to form their own racing formula! There would be no such thing as teams dropping out of F1 due to costs if the teams saw 50% of that revenue!

    2. Bigbadderboom
      5th June 2011, 10:42

      @ Burnout, it does seem that way, but the economic impact is far more widespread than that. Although some Governments and local governments often complain about the costs of hosting races (A negotiating tactic normally, the fact is that in most situations the financial benefit to the local economies is often 2-4 times that of hosting the race, the ticket revenue is the obvious stream, but the additional employment, tourist and secondary business income is substantial. Mr Alzahani who is circuit chairman in Bahrain claimed that holding the event supports 3000 jobs, encourages 100,000 visitors and helps generate $500 million in income to their economy. Although maybe these claims are slightly exagerated the fact is holding an F1 race is very viable and often lucrative despite the initial costs.
      If anybody is still in doubt of the economics, then why have so few given up the opportunity to host one and why are so many new enterprises keen to hold them?

  3. $50m for a race? How are they going to get a profit out of that? Unless the dollar becomes absolutely worthless in the coming years. LAK will disagree with me, but I don’t think Bahrain will ever get a profit out of the Grand Prix. F1 is only there because F1 is the hobby of the Crown Prince. Don’t shoot me!

    1. Kind of agree. And I don’t think a dull desert is really appealing for tourists.

    2. I don’t think places like China, Abu Dhabi and Bahrain are in it for profit…

      1. And neither will Zimbabwe or North Korea.

    3. Hotels, restaurants, bars etc all make a massive profit. I read here that Austriala’s profit is in the 100 millions when you take this into account. So I believe in the business case for 100 million races.

      1. That $100 million profit is made up of expected income from hotels / bars / restaurants.. not just for the race track. Increasing to $100 million race fee would really hurt the race planning as they just dont make that much from ticket / advertising sales.

  4. BBC is reporting that the chairman of the Bahrain GP has said the race is on.


    1. Is it just me? Or is this sounding very much like apartheid south Africa?

  5. It’s unsustainable to the max, especially for the newer/Asian countries who pay much more and generate far less profit. The bubble will burst soon enough.

    Could you post the list/venues of how much they each pay to Bernie?

  6. @ Dutch Bear.

    I liked that about the Prince. You make a good point, what has amazed me about Bahrain is the Abu Dhabi Grands Prix. Here you have one race which is clearly struggling to sell tickets, pretty much buckling under its own weight, and then you allow a seperate race to be held right on its doorstep. To make matters worse, the later race you make a season finale of all things, the one event other than Monaco that everybody wants to see, especially if the championship is as tight as 2010’s was.
    The same could be said of Sepang. Would you rather pay huge sums to watch Sepang from the stands or the neighbouring Singapore street race with the added incentive of being held at night? I know my cash would be on Singapore thats for sure!
    Personally, Dutch Bear is right. The Bahrain Grands Prix is and always will be a financial disaster. As a means of attracting temporary worldwide attention and glamour, it is solid gold. After all, only the World Cup and the Champions League can rival Formula One for global exposure and audience numbers. Not many better ways I can thing of the sell yourself and your nation than that.
    What pains me however is that if F1 is truly global, why not spread are horizons wider. For instance we only have one South American race in Brazil per year which is quite frankly a joke given the size of South America and the fact that we have so many drivers from there. Mexico and Argentina would be two countries I would like to see return to the fold.
    Also, what about Africa? Not so long ago people scoffed about a return to South Africa for Formula One, however last year’s World Cup proved that they can more than cope with staging large events and they do them well. Everybody harps on about how dangerous Cape Town is and that people get their fingers cut off for a gold ring etc etc, but that is no different in Brazil for instance (just ask Jenson Button on that one).
    And then there is Europe. France still does not have a race, neither does Holland. A Scandinavian country would be nice, even Finland maybe. Kimi could come back and kick Lewis’ arse at snowmobiling

  7. With all the talk about corruption in FIFA and countries paying/bribing each other for the world cup…surely the amount and method that Bernie [et al] requests to have a grand prix is worth investigating too.

    1. Fair point but I don’t agree. FOM present themselves very much as a business and they aren’t ashamed of that, nor should they be. FIFA do not represent themselves as a business and perhaps have more to consider than just money, or not as the case may be!

  8. You got linked in the BBC news roundup for F1 Keith. Good job :)

    1. Cool!

  9. The cost of hosting the Singapore grand prix is actually US$100m at the moment.

  10. Good news.

    We’re on the cusp of a new Concorde Agreement so this should be interesting to follow in the future..

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