How does Formula 1 make money? Full breakdown of revenue at the highest level of motorsport

The sport operates in more than 20 countries, attracts hundreds of millions of television viewers and generated $3.87 billion in revenue in 2025. Yet the mechanics behind that figure remain largely opaque to most fans: who actually gets paid, by whom, and for what."

F1's commercial model rests on four primary revenue streams. Media rights lead the way, followed by race promotion fees, sponsorship, and a combined category covering hospitality, licensing, and digital services. Each grew independently in 2025, which underpins the stability of Liberty Media's financial model.

All of that revenue flows to Liberty Media as the commercial rights holder. Approximately $1.4 billion (45% of the total) is then redistributed to the competing teams as prize money under the terms of the Concorde Agreement. The remaining 55% covers Liberty's operational costs and generates profit for the group.

The exact figures are private under the terms of the Concorde Agreement, but enough detail has emerged through Liberty Media's public filings and third-party analysis to understand the structure.

The prize pool splits across three layers:

●     75% is distributed based on each team's finishing position in the previous season's Constructors' Championship.

●     20% rewards historical performance based on top-three finishes across the preceding ten seasons.

●     5% goes to Ferrari as a guaranteed heritage payment written into every Concorde Agreement, recognising the Scuderia as the only constructor to have competed in every F1 season since 1950.

The practical result of this structure is that McLaren, despite winning both the Drivers' and Constructors' Championships in 2025, collected the fourth-highest prize payment on the grid. Ferrari, which finished fourth in the Constructors' Championship and did not win a single race, took home the largest cheque of any team.

From 2026, the arrival of Cadillac as an eleventh constructor changes the arithmetic. The prize pool now divides eleven ways rather than ten. Cadillac paid a reported $450 million anti-dilution fee upon entry, distributed as $45 million to each existing team as a one-time offset.

Using 2025 figures as a baseline, Cadillac is estimated to receive approximately $63 million in prize money during its debut season, while McLaren's projected payment drops from $165.8 million to around $127.9 million as a direct consequence of the expanded pool.

Media rights account for approximately 31% of F1's total annual revenue, generating roughly $1.2 billion in 2025 from broadcasting agreements across more than 180 territories. F1 sells its rights market by market, and the value of those deals has risen sharply: the sport's cumulative television audience reached 1.5 billion viewers in 2025, up from 400 million in 2015.

Apple's deal in the United States illustrates how far that value has climbed. In October 2025, the company secured exclusive US broadcasting rights for five years at a reported $140 to $150 million per season, up from the $85 to $90 million ESPN had been paying annually. US rights income effectively doubled in a single contract cycle, and the deal positions F1 inside Apple's broader entertainment ecosystem, giving the sport access to a distribution platform with over one billion active devices globally. The same appetite for long-term commitment is visible in Europe, where Sky Sports extended its agreements in the United Kingdom through 2034 and in Italy through 2032.

Beyond traditional broadcast, F1's own streaming platform F1 TV has grown into a meaningful secondary revenue stream, offering subscribers live race coverage, onboard camera feeds, and an archive of historic races. The Netflix documentary series Drive to Survive also played a measurable role in audience expansion, particularly among younger demographics in North America, and contributed to the improved terms F1 was able to negotiate with broadcasters from 2022 onwards.

Every circuit on the Formula 1 calendar pays a fee to Liberty Media for the right to host a Grand Prix. Those fees generated $1.03 billion in 2025, accounting for 27% of F1's total revenue. With the calendar at 24 races in 2025, the maximum permitted under the Concorde Agreement, growth in this segment comes primarily from escalator clauses built into existing contracts rather than new additions.

Standard hosting agreements include annual fee increases, giving Liberty Media a predictable and growing revenue base regardless of on-track performance.

The Las Vegas Grand Prix operates under a different model entirely. Rather than collecting a hosting fee from a third-party promoter, F1 owns and manages the event directly, retaining the full commercial upside of the weekend.

The 2025 edition sold out, drew over 300,000 fans across the race weekend, and generated an estimated economic impact exceeding $1 billion for the Las Vegas region. Liberty Media has indicated this direct-ownership approach could serve as a template for future events in premium markets.

Ticket sales from race weekends flow primarily to the local promoter, not to F1. The hosting fee is the mechanism through which Liberty captures its share of the event's commercial value.

The gap between circuits illustrates how commercial weight now drives calendar decisions more than sporting heritage: Saudi Arabia and Bahrain each pay north of $50 million per year, while the Monaco Grand Prix, one of the oldest events in motorsport history with a race held every year since 1950, paid $20 million annually under its previous contract, the lowest fee on the entire calendar.

Liberty Media pushed for a significant increase at renewal, and Monaco ultimately signed a new deal through 2035 at reportedly double its previous rate.

Sponsorship generates 22% of F1's total revenue, approximately $850 million in 2025, and operates across two distinct tiers: partnerships sold by Liberty Media at sport level, and deals negotiated independently by each constructor. The two reinforce each other, as a stronger F1 brand raises the value of team partnerships, and high-profile team sponsors amplify the sport's visibility.

At sport level, Liberty Media sells partnerships that give brands official category exclusivity, branding across all 24 race weekends, and integration into F1's media and hospitality platforms. Global partners at the top of that structure pay between $40 and $150 million per year.

The headline deal of the current era is the LVMH partnership, active from 2025: the luxury conglomerate signed a 10-year agreement covering Louis Vuitton as title partner for select Grands Prix, TAG Heuer as official timekeeper replacing Rolex, and Moët Hennessy across hospitality and podium celebrations.

The deal is reported to be worth approximately $150 million per year, making it the largest commercial partnership in F1's history. Aramco, Salesforce, and Crypto.com round out the top tier, each committed through at least 2030.

F1's audience profile explains why premium brands compete for these slots. Nielsen Sports estimates that global interest in F1 has grown 5.7% since 2021, with the sport now boasting more than 750 million fans globally, 41% of whom are women, and the fastest-growing demographic being females aged 16 to 24.

For luxury and technology brands, that audience, skewing affluent, educated, and international, is difficult to replicate through any other single sporting property.

The introduction of the cost cap in 2021 changed the logic of team-level sponsorship. Starting at $135 million per season, the cap compressed budgets across the grid and pushed teams to maximise commercial income to offset the ceiling. The limit has since been raised to $215 million for 2026 to account for inflation and new cost categories, but the structural shift it triggered remains in place.

By 2025, McLaren set a record with 53 active commercial partnerships, generating over $148 million in sponsorship revenue for the season, more than any team in the sport's history. Their top partners included Google at $40 million per year, British American Tobacco at $30 million, and OKX at $25 million annually.

Beyond title deals, teams generate income through a range of commercial partnerships, from technical agreements to regional sponsors. HP became Ferrari's title partner from 2025 in a deal estimated at approximately $100 million per year, matching Oracle's arrangement with Red Bull and making both the joint-highest team sponsorship deals on the grid.

Petronas, Mercedes' title partner, pays an estimated $70 million annually. Stake, one of the biggest online casino platforms, served as Sauber's title sponsor for the 2024 and 2025 seasons in a deal estimated at around $50 million per year, before the team transitioned to Audi for 2026 with fintech company Revolut taking over as title partner. Mastercard joined McLaren as a naming partner for 2026.

Teams with manufacturer backing benefit from an additional layer of shared resources that does not appear on standard income statements.

Mercedes F1, for example, has historically accessed Mercedes-Benz data centres, engineering infrastructure, and logistics networks at below-market cost, representing significant value that smaller independent teams cannot replicate.

Engine supply also generates direct revenue for manufacturers. For the 2026 season, Mercedes supplies power units to McLaren, Williams, and Alpine in addition to its works team. Ferrari supplies Haas and Cadillac.

Red Bull Powertrains, developed in partnership with Ford, powers both Red Bull and Racing Bulls. Honda supplies Aston Martin exclusively, and Audi supplies its own works team. Engine lease agreements are estimated to be worth between $15 million and $25 million per customer team per season.

The combined effect of prize money, team sponsorships, manufacturer support, and engine income means that the financial gap between the top and bottom of the grid, while still wide, is substantially narrower than it was before Liberty Media's reforms. That narrowing has not dampened valuations, quite the opposite.

The average F1 team valuation reached $2.31 billion in 2024 and $3.42 billion in 2025, more than double the 2023 figure, reflecting both the sport's commercial growth and the improved financial sustainability of even the smaller constructors.

The remaining 20% of F1's revenue, approximately $770 million in 2025, comes from a collection of sources that have grown significantly under Liberty Media: premium hospitality, support series, merchandising, licensing, and digital services.

The F1 Paddock Club is the most profitable of these. Unlike general ticket sales, which flow to the local race promoter, Paddock Club hospitality packages are sold directly by F1 and carry high margins. A Paddock Club pass for a single race weekend can cost between $5,000 and $15,000 depending on the circuit, covering trackside viewing suites, gourmet catering, and access to the pit lane during select sessions.

With 24 races on the calendar and a waiting list at several events, this segment generates consistent revenue regardless of race location.

The race weekend itself extends beyond the main event. FIA Formula 2, FIA Formula 3, and the F1 Academy each run their own media rights and sponsorship arrangements, with their races broadcast alongside the main F1 weekend. These series also serve as talent pipelines, which reinforces their narrative value to broadcasters and sponsors alike.

Beyond the track, digital services have become an increasingly meaningful contributor. F1 TV, the sport's direct-to-consumer streaming platform, offers live race feeds, onboard cameras, and a full archive of historic content.

Subscriber numbers have not been disclosed publicly, but Liberty Media has consistently cited F1 TV growth as a strategic priority, particularly in markets where broadcast rights are locked behind expensive pay-TV packages.

The 2025 film F1, produced by Apple and starring Brad Pitt, added an unusual one-off dimension to this category. The film grossed over $633 million at the global box office and generated an estimated $40 million in embedded brand placements across race sequences filmed at live Grand Prix weekends throughout the 2024 season.

While not a repeatable revenue line, it demonstrated the commercial value of F1's entertainment crossover potential and contributed directly to the audience growth Apple is now banking on with its broadcasting investment.

F1 generated around $1.8 billion in revenue in 2017, the year Liberty Media acquired the commercial rights. The $3.87 billion recorded in 2025 is the result of eight years of consecutive growth, driven by US expansion, new broadcast deals, and a surge in sponsorship demand.

Q1 2026 revenue reached $617 million, up 53% year on year, driven by a combination of underlying commercial growth and one additional race held in the quarter compared to Q1 2025. The 2026 calendar is scheduled for 22 races following the cancellation of the Bahrain and Saudi Arabian Grands Prix due to geopolitical tensions.

The new technical regulations introduced for 2026, including a revised power unit architecture, have attracted renewed manufacturer interest and are expected to support further sponsorship growth through the second half of the decade.