Formula 1 Sponsorship Soars Past $2 Billion Milestone

Formula 1 has reached a significant financial landmark, with independent research indicating that sponsorship revenue across the sport topped $2 billion for the first time in 2024. This figure positions F1 among the global elite in terms of commercial partnerships, surpassing several major American sports leagues. A report by SponsorUnited highlights that F1 and its ten teams collectively generated $2.04 billion from sponsorships last year. This puts Formula 1 ahead of leagues such as the NBA, MLB, and NHL in annual sponsorship earnings, with only the NFL reporting a higher total at $2.5 billion. Notably, the structure of F1's commercial deals differs significantly from the NFL. The report reveals that F1 teams average over $6 million each from partnerships, a figure substantially higher—around eight times more—than the average sponsorship revenue generated by individual NFL teams. This robust growth is attributed in large part to the strategic direction taken since Liberty Media acquired the sport. The shift towards an entertainment-focused approach has broadened F1's appeal and attracted a wider range of global partners. The predictable nature of income streams, derived from multi-year sponsorship and television contracts typically spanning three to ten years, contributes to the sport's financial stability and increasing valuations. Leading the way in terms of team sponsorship earnings are consistently the grid's powerhouses: Mercedes, Ferrari, Red Bull, and McLaren. The report also detailed the sectors investing heavily in F1, with the technology sector accounting for over half a billion dollars in partnership income across the teams. Certain advertising positions on the cars are particularly lucrative. The airbox, located above the driver's head, and the sidepods are identified as among the most expensive sponsorship assets, capable of fetching upwards of $5 million each for the top teams. The increasing financial health is reflected in team valuations. Long-term partnerships and sustainable growth metrics justify the rising market value of F1 franchises, which are now being valued using peer group comparisons, revenue multiples, and EBITDA multiples. Overall, the report underscores Formula 1's thriving commercial landscape, cementing its status as a premier global platform for brands and demonstrating the success of its recent growth strategy.