When watching Formula 1 races, it is easy to notice obvious business elements: spectators in the stands, cars on the track, and a winner on the podium. However, a significant portion of the revenue from ticket sales does not go to Formula 1 itself. These funds are directed to the local race promoter. What the parent company F1, Liberty Media, actually receives is a fee for the right to host the event, which is paid by the track or, increasingly, by the national government.
F1 Revenue Model
The F1 financial report for 2025 demonstrates four uneven but complementary sources of income. According to Liberty Media's annual results, media rights accounted for 31.3% of total F1 revenue, while hosting fees were 26.7%. The remaining categories include sponsorship (21.7%) and other expenses such as hospitality, freight, licensing, and F1 TV (20.3%). The absence of a dominant source makes this model very resilient.
Total revenue reached a record $3.87 billion in 2025, which is 14% more than the previous year. Revenue has been growing for the fifth consecutive season. Excluding the 2020 campaign, disrupted by the pandemic and a shortened schedule, growth has been almost annual since Liberty Media acquired the sport from the CVC Capital Partners consortium in 2017.
Hosting Fee Dynamics
The hosting fee indicator reflects this growth in miniature. In 2017, after Liberty took over management, promoter fees amounted to $503 million, which was approximately 34% of the sport's main revenue. Eight years later, this single expense item increased to $824 million. Although the share of these fees in the overall volume has slightly decreased over this period, this indicates not stagnation, but a significant increase in the entire business surrounding them.
Differences in Hosting Fees
The substantial gap in the amounts paid by different tracks is a rather unusual phenomenon. Monaco, one of the oldest and most prestigious races held since 1929, long paid about $20 million per year, which is the lowest rate in the grid. Liberty actively sought to extend the contract, and now Monaco is secured until 2035. Reports suggest the new fee has significantly increased, although the exact amount has not been officially disclosed.
In comparison, Qatar, Saudi Arabia, and Azerbaijan pay an estimated $55 to $57 million annually. The Lusail circuit in Qatar signed a 10-year contract worth $550 million, meaning the race added to the calendar in 2021 costs nearly three times more than the sport's premier race. Saudi Arabia's total expenditure on F1, including hosting fees and global Aramco sponsorship, is estimated to exceed $100 million per year, although component details are not published.
Traditional European tracks, such as Silverstone, Monza, and Spa, primarily rely on ticket sales and commercial partnerships to cover their costs, largely funding themselves. Races in Gulf countries operate on a fundamentally different model: their hosting fees are paid or substantially subsidized directly by national governments, rather than through ticket revenue or local promoters trying to break even.
Economic Influence on the Calendar
Some analysts and commentators call this a form of 'sports laundering' or national branding, where a major global sporting event is used to shape international perception. Host governments, however, typically frame it differently—as investments in tourism and economic development, rather than image management. Both views may point to the same financial balance.
The most obvious proof that the economics of hosting races now shapes the F1 calendar occurred in 2026 when the Bahrain and Saudi Arabian Grand Prix were cancelled due to armed conflict in the Middle East. Both countries were among the Gulf nations affected during the fighting following US airstrikes on Iran. F1 confirmed the cancellations instead of postponements, reducing the season from 24 to 22 races.
According to a Guggenheim analysis, these two races together account for about $115 million in hosting fees, which is roughly 14% of all F1 revenue from promoter fees. Nevertheless, the core financial structure of the sport barely wavered. Broadcasting rights, sponsorship agreements, and prize money distribution—the contracts that actually underpin the business—are not adjusted or reduced simply because one or two races disappear from the calendar. The races themselves have become more interchangeable elements in a much larger revenue-generating machine.
Significance Beyond Motorsport
The true business of F1 is not in the fast-moving cars, nor has it ever been in ticket sales. It is a media company and a sponsorship platform that happens to host races, and its financing is increasingly provided by governments willing to pay huge sums for the global visibility that the Grand Prix weekend provides.
The finish line creates excellent television content. But the money is transferred long before any car hits the track, within contracts signed between Liberty Media and national treasuries that have decided that hosting Formula 1 is worth the investment, regardless of what happens on the track.