Sporticast: Breaking Down F1’s Billion-Dollar Business Rise
On the latest Sporticast episode, hosts Scott Soshnick and Eben Novy-Williams chat with Sportico colleague Kurt Badenhausen about his latest F1 valuations. Ferrari is the circuit’s most valuable team at $3.13 billion, followed by Mercedes ($2.7 billion) and Red Bull ($2.42 billion). Overall, the circuit’s enterprise value is $18.6 billion.
That’s increased significantly over the past few years. The trio discusses the underlying factors, including new cost caps, expansion to new markets in Asia and North America, and a new media approach under owner Liberty Media that includes the popular docuseries Formula 1: Drive to Survive. It’s flipped the switch on team profitability. McLaren, as an example, lost $137 million in 2018 and is on pace to be profitable this season.
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The trio also talks about potential lessons for global soccer in F1’s business turnaround. Leagues like the English Premier league also have dramatic inequality in on-field team performance, but with much weaker spending restrictions. That’s unlikely to change, because the big teams like Chelsea and Manchester City don’t currently want it to, but is F1 making a case for a more unified approach to expenses? Or does the sport’s unique structure present hurdles that F1 didn’t have to overcome?
Lastly, the trio discuses two other recent news stories. Fanatics is once again on the verge of buying PointsBet’s U.S. business—at a 50% higher price—and now has a budding business rivalry with DraftKings. The NFLPA has a new executive director, Lloyd Howell Jr., whose background sheds some light on the business of modern players unions.
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