F1 Comm. Rights Revenues to Double to USD3.2bn by 2016

June 2, 2011

According to a report published yesterday, June 2, in partnership with CNC Communications named ‘Formula Money’, annual revenue from the sport’s commercial rights is set to double in the next five years to more than US$3bn.

The report predicted that much of this is going to come from inflated hosting fees, predicting that annual revenues for the Formula One Group would rise at a rate of 12.7 per cent to reach $3.253bn by 2016, compared to an estimated $1.587 billion in 2010.

The report claimed: “Revenues are expected to hit $1,789m this year before passing the $2 billion mark for the first time in 2012. “One of the key areas of expansion is expected to be race hosting fees, which brought in an estimated $568m in 2010,” said the report, after CNC Communications have worked with teams, sponsors and car manufacturers.

It continued: “Most race contracts include an annual escalator and upcoming races in new markets such as Russia and India are expected to pay above the average rate.”

The report went on to claim that the highest race hosting fee would rise to more than $100 million by the end of the decade and continued to say that the increased revenue would also be a boost for the teams, who receive half of the sport’s underlying profits as prize money.

Prize money could also overtake sponsorship as the teams’ biggest source of cash, with the report adding: “Formula Money predicts that in 2016 the total prize fund will come to $1,575m, with the winner of the constructors’ championship taking home a $222m reward.

“This amount is bigger than the entire annual budget of seven of the current 12 teams and compares to the $87m that Red Bull Racing received for winning the championship in 2010.”

The report calculated that total team sponsorship and supplier deals fell to $802m in 2010 but had shown strong growth in 2011 and had already reached $887 million by the start of the season in March.

The report, a statistical review of Formula One’s finances, uses data from various sources in a sport where official figures are hard to obtain and sponsorship details are kept secret.