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|'''Website'''
|'''Website'''
|[https://www.formula1.com/ formula1.com]
|[https://www.formula1.com/ formula1.com]
|'''Pitch'''
|<Youtube>TJlrvm1xFuw</Youtube>
|}
|}
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* '''Stefano Domenicali:''' Currently the CEO of the Formula One Group, took over from Chase Carey. He previously served as the CEO of Italian sports car manufacturer Lamborghini from 2016 to 2020. Additionally, he held the role of team principal for the Scuderia Ferrari Formula One team. It was during his leadership that Ferrari secured their most recent Formula One World Championship victory<ref>https://en.wikipedia.org/wiki/Stefano_Domenicali</ref>.
* '''Stefano Domenicali:''' Currently the CEO of the Formula One Group, took over from Chase Carey. He previously served as the CEO of Italian sports car manufacturer Lamborghini from 2016 to 2020. Additionally, he held the role of team principal for the Scuderia Ferrari Formula One team. It was during his leadership that Ferrari secured their most recent Formula One World Championship victory<ref>https://en.wikipedia.org/wiki/Stefano_Domenicali</ref>.
* '''Chase Carey:''' The former chief executive officer and executive chairman of the Formula One Group. He has previously worked for News Corp, DIRECTV, 21st Century Fox and Sky plc<ref>https://en.wikipedia.org/wiki/Chase_Carey</ref>.
* '''Chase Carey:''' The former chief executive officer and executive chairman of the Formula One Group. His previous roles also include working with News Corp, DIRECTV, 21st Century Fox, and Sky plc<ref>https://en.wikipedia.org/wiki/Chase_Carey</ref>.


=== Revenues ===
=== Revenues ===
{| class="wikitable sortable"
{| class="wikitable sortable"
|+
|+<ref>https://companiesmarketcap.com/formula-one-group/revenue/</ref>
|'''Year'''
|'''Year'''
|'''Revenue'''
|'''Revenue'''
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Using 2022 as an example, the primary revenue of F1 was divided among race promotion fees (28.6%), media rights (36.4%), and sponsorship (16.9%)<ref>https://www.autoracing1.com/pl/391479/f1-series-revenue-grows-by-20-to-2-5b-for-2022/</ref>.


=== Financials ===
=== Competitors ===
[[File:Fwonk.PNG|center|thumb|900x900px|[[File:Fwona.PNG|center|thumb|900x900px]]]]


* Formula One Group is forecasted to grow earnings and revenue by 3.1% and 11% per annum respectively. EPS is expected to grow by 5.5%. Return on equity is forecast to be 6.3% in 3 years.
* '''IndyCar:''' An American-based organization that oversees Indy car racing and various other types of open-wheel car racing. The organization is responsible for managing two racing series: the top-tier IndyCar Series, centered around the iconic Indianapolis 500 race, and the developmental series Indy NXT.<ref>https://en.wikipedia.org/wiki/IndyCar</ref>.
* Earnings vs Savings Rate: FWON.K's forecast earnings growth (3.1% per year) is above the savings rate (2.2%).
* '''NASCAR:''' This is an American company that regulates and manages auto racing, primarily recognized for its involvement in stock car racing. It's regarded as one of the leading motorsports organizations globally and stands as one of the most significant spectator sports in the United States.<ref>https://en.wikipedia.org/wiki/NASCAR</ref>.
* Earnings vs Market: FWON.K's earnings (3.1% per year) are forecast to grow slower than the US market (15.7% per year).
* High Growth Earnings: FWON.K's earnings are forecast to grow, but not significantly.
* Revenue vs Market: FWON.K's revenue (11% per year) is forecast to grow faster than the US market (7.7% per year).
* High Growth Revenue: FWON.K's revenue (11% per year) is forecast to grow slower than 20% per year.


=== Future<ref>https://frontofficesports.com/newsletter/the-unstoppable-rise-of-formula-1/</ref> ===
=== Stocks ===
F1’s renewed three-year deal with ESPN is reportedly in the $75-$90 million annual range, up from $5 million per year from the current agreement.
[[File:Fwonk.PNG|center|thumb|900x900px|<ref>https://www.libertymedia.com/investors/stock-data/quote/fwonk#symbol_fwonk</ref>[[File:Fwona.PNG|center|thumb|900x900px|<ref>https://www.libertymedia.com/investors/stock-data/quote/fwona#symbol_fwona</ref>]]]]


While the figure might seem low compared to the NBA’s $2.6 billion annual pact with Turner and ESPN — or the $2.6 billion the latter paid for “Monday Night Football” alone — the deal represents a stepwise increase in the previous value.
* FWONA represents the Series A shares, which come with voting rights, whereas the FWONK shares belong to Series C and lack voting rights. FWONK shares are traded at a significantly higher volume compared to FWONA shares<ref>https://tickeron.com/compare/FWONA-vs-FWONK/</ref>.


Assuming the high end of the ESPN deal is $90 million, that’s an 18x increase in value.  
* As of August 2023 the Formula One Group has a market cap of $16.33 B. This makes Formula One Group the world's 1061th most valuable company by market cap<ref>https://companiesmarketcap.com/formula-one-group/marketcap/</ref>.


According to SBJ, Amazon and Comcast also submitted bids, with Amazon rumored to have offered $100 million annually. Ultimately, the decision to stick with ESPN at a lower valuation likely boils down to their existing relationship.
* FWONK has become profitable over the past 5 years, growing earnings by 23.4% per year<ref>https://simplywall.st/stocks/us/media/nasdaq-fwon.k/formula-one-group/past</ref>.


Since 2018, F1 has seen a steady increase in average viewership per race in the U.S. — from half a million in 2018 to almost 1.5 million in the 2022 circuit.
* Formula One Group is forecasted to grow earnings and revenue by 3.1% and 11% per annum respectively. EPS is expected to grow by 5.5%. Return on equity is forecast to be 6.3% in 3 years<ref name=":0">https://simplywall.st/stocks/us/media/nasdaq-fwon.k/formula-one-group/future</ref>.
* Earnings vs Market: FWONK's earnings (3.1% per year) are forecast to grow slower than the US market (15.7% per year)<ref name=":0" />.
* Revenue vs Market: FWONK's revenue (11% per year) is forecast to grow faster than the US market (7.7% per year)<ref name=":0" />.


* 2018: 547,722 viewers
=== DCF<ref>https://simplywall.st/stocks/us/media/nasdaq-fwon.k/formula-one-group/news/formula-one-groups-nasdaqfwonk-intrinsic-value-is-potentiall</ref> ===
* 2019: 672,000 viewers
[[File:DCFF1.png|center|thumb|600x600px]]
* 2020: 608,000 viewers
* 2021: 934,000 viewers
* 2022: 1,400,000 viewers


The 47% increase from 2021 alone has helped spur F1’s financial success. According to the most recent filings, Formula One Group generated $360 million in revenue during Q1 2022, a 100% increase from the same period in 2021.
* Formula One Group's estimated fair value is $53.75 based on two-stage FCFF.
* The current share price of the Formula One Group at $71.75 suggests a potential overvaluation of around 33%.
* The analyst's price target for FWONK is set at $81.00, indicating a notable 51% increase compared to the fair value estimate.


And when compared to other “up and coming” sports properties, F1 has the edge when it comes to viewership. Take for example the recent MLS deal with Apple, which will see MLS make $2.5 billion for the 10-year life of the contract. When it comes to total viewership, F1 races trounce MLS matches.  
=== Growth of F1<ref>https://frontofficesports.com/newsletter/the-unstoppable-rise-of-formula-1/</ref> ===
F1's recently renewed three-year agreement with ESPN is reportedly valued between $75 to $90 million annually, showcasing a notable increase from the current deal's $5 million per year. While this amount might seem modest when compared to the NBA's massive $2.6 billion yearly contract with Turner and ESPN, the F1 deal represents a significant step forward from its previous value. Both Amazon and Comcast also submitted bids, with rumors suggesting that Amazon's bid hovered around $100 million annually.


* According to F1 analyst Vincenzo Landino, MLS matches typically top out at 500,000 viewers.
Starting in 2018, Formula One has witnessed a consistent rise in the average viewership per race in the United States, escalating from around half a million viewers in 2018 to nearly 1.5 million during the 2022 circuit.
* The 2021 average for ESPN broadcast matches was just under 280,000.
{| class="wikitable"
* Formula 1, on the other hand, averaged 934,000 viewers on ESPN for the 2021 season.
|+
 
|'''Year'''
There is one part of the deal that still requires some consideration: As it currently stands, F1 races are commercial-free. In order to capitalize on the deal, ESPN will likely move some of the races over to its subscription product, ESPN+.
|'''Number of viewers per race'''
 
|-
The F1 deal could act as an elegant Trojan Horse to bring customers onto the platform — and all it will cost…is an annual $90 million.
|2018
 
|547,722
=== Growth ===
|-
 
|2019
=== Record Attendance ===
|672,000
Formula 1 saw record attendance in 2022 and is likely to surpass that in 2023 with the addition of the Las Vegas Grand Prix which will bring the series to 24 races. Total attendance for 2022 was 5.7 million, up 36% compared to 2019, the last year before the pandemic.
|-
 
|2020
=== Growing Television Audience ===
|608,000
F1 reached new agreements with ESPN for the U.S., and later for extensions in Latin America, Mexico, and the Caribbean. Formula 1 will be broadcast on ESPN Extra and digitally on ESPN Play in the Caribbean, and on ESPN and the Fox Sports networks in Argentina and Chile. There will also be dedicated F1 coverage across ESPN.com and social media throughout the season. The extension with ESPN for the U.S. that runs through the end of the 2025 season is reportedly between $75 million and $90 million annually.
|-
 
|2021
In a sign of growing popularity in the U.S., ESPN set records for viewership in 2022 posting an average of 1.21 million viewers per race across ESPN, ESPN2, and ABC, a 28% increase over the previous U.S. television record of 949,000 average viewers that was set in 2021. The 2022 season also became the first in U.S. television history to average 1 million or more viewers per race. For 2021, F1 reported a global TV audience of 1.55 billion.
|934,000
 
|-
=== Sponsorship Growth ===
|2022
Formula 1 is especially popular with sponsors due to the race schedule being global. Brands looking to tap either global or regional, audiences can see their names attached to liveries on the cars for the season or particular races. With the popularity increasing in America, more brands are attaching themselves there. Heineken and Mercedes have invested heavily in the U.S. in 2023. Both are now sponsors for all F1 races on the Walt Disney Co. of networks of ESPN and ABC with Mercedes as the presenting sponsor.
|1,400,000
 
|}
“No one has the depth, diversity, and width of sports offerings as Disney and Formula 1 is the perfect example of this,” said Sean Hanrahan, SVP, Disney Advertising Sports Brand Solutions. “Through this property, we are able to expand our reach and curate an incomparable advertising experience for brands.”
The significant 47% increase just in 2021 alone has played a crucial role in boosting Formula One's financial achievements. As indicated by the latest filings, the Formula One Group managed to generate $360 million in revenue during the first quarter of 2022, marking a remarkable 100% surge compared to the corresponding period in 2021. This growth in audiences also attratcs sponsor such as SalesForce, DHL, Rolex, amaco, AWS, MSC Cruises, Qatar Airways, Liqui Moly, and Heineken.
 
Heineken is the presenting sponsor of the Las Vegas Grand Prix that is seeing unprecedented interest as a November night race.
 
Major brands that are part of the F1 racing series sponsorships include SalesForce, DHL, Rolex, amaco, AWS, MSC Cruises, Qatar Airways, Liqui Moly, Heineken, and more.


=== Risks<ref>https://www.kunalsf1blog.com/liberty-media-risk-factors-f1-business/</ref> ===
=== Risks<ref>https://www.kunalsf1blog.com/liberty-media-risk-factors-f1-business/</ref> ===


* There could be a decline in the popularity of Formula 1, which may have a material adverse effect on Formula 1’s ability to exploit its commercial rights to the World Championship.
* A potential decrease in Formula 1's popularity could negatively impact its capacity to effectively utilize its commercial rights to the World Championship, potentially leading to significant adverse consequences.
* Termination of the 100-Year Agreements could cause Formula 1 to discontinue its operations.
* If the 100-Year Agreements are terminated, Formula 1 could face the possibility of ceasing its operations.
* Teams may, in certain circumstances, terminate their existing commitment to participate in the World Championship until (and including) 2025 or breach their obligations and withdraw.
* Under specific circumstances, teams have the option to terminate their current commitment to participate in the World Championship up to and including 2025, or they might breach their obligations and withdraw.
* Formula 1 is exposed to credit-related losses in the event of non-performance by counterparties to Formula 1’s key commercial contracts.
* F1 faces the risk of experiencing credit-related losses if the counterparties to its essential commercial contracts fail to fulfill their obligations.
* Formula 1 may face difficulties expanding into new markets, including as a result of being unable to attract race promoters for new Events.
* F1 could encounter challenges when trying to expand into new markets, which might include difficulties in attracting race promoters for new events.
* Accidents during Events may cause losses that are not covered by insurance, disrupt an Event and cause Formula 1 reputational damage.__INDEX__
* Incidents during events could lead to losses that insurance doesn't cover, potentially disrupting the event and causing reputational h__INDEX__arm to F1.

Latest revision as of 13:06, 11 August 2023

Industry Motorsport
Founder Bernie Ecclestone
Headquarter 2 St. James's Market, London, U.K.
Area served Globally
Brands Formula 1 Paddock Club
Key people Stefano Domenicali (CEO & President) Chase Carey (Non-executive Chairman)
Traded as FWONA FWONK
Website formula1.com Pitch

SummaryEdit

  • The Formula One Group is a company that manages the commercial aspects of the Formula One World Championship, which is a premier international motorsport competition featuring single-seater racing cars.
  • The group is responsible for organizing and promoting the races, negotiating broadcasting rights, managing sponsorships, and overseeing various business aspects of the sport.

Mission & vision[1]Edit

  • Enhancing the fan experience: The F1 Group aimed to enhance the sport's appeal to fans by improving its digital and social media presence. They wanted to offer more behind-the-scenes content and provide better access to race data and insights, making the sport more accessible and engaging for everyone.
  • Global expansion: The F1 Group had a goal of increasing the sport's popularity in different parts of the world, including new markets. They worked on this by considering new races and expanding the reach of the sport to new areas.
  • Technical innovation: F1 has a history of being a platform for technical innovation in motorsport. The vision included promoting advancements in areas such as safety, sustainability, and hybrid technology.
  • Sustainability: The F1 Group focus on making F1 more environmentally responsible. This involved working to decrease the sport's carbon footprint, incorporating more sustainable materials, and advocating for efficient energy usage.
  • Entertainment: The F1 Group aimed to enhance the entertainment value of the sport, making it not only about racing but also about creating a captivating spectacle for fans.

TeamEdit

  • Stefano Domenicali: Currently the CEO of the Formula One Group, took over from Chase Carey. He previously served as the CEO of Italian sports car manufacturer Lamborghini from 2016 to 2020. Additionally, he held the role of team principal for the Scuderia Ferrari Formula One team. It was during his leadership that Ferrari secured their most recent Formula One World Championship victory[2].
  • Chase Carey: The former chief executive officer and executive chairman of the Formula One Group. His previous roles also include working with News Corp, DIRECTV, 21st Century Fox, and Sky plc[3].

RevenuesEdit

[4]
Year Revenue Change
2023 $2.59 B 0.82%
2022 $2.57 B 20.46%
2021 $2.13 B 86.55%
2020 $1.14 B -43.37%
2019 $2.02 B 10.67%
2018 $1.82 B 2.47%
2017 $1.78 B

Using 2022 as an example, the primary revenue of F1 was divided among race promotion fees (28.6%), media rights (36.4%), and sponsorship (16.9%)[5].

CompetitorsEdit

  • IndyCar: An American-based organization that oversees Indy car racing and various other types of open-wheel car racing. The organization is responsible for managing two racing series: the top-tier IndyCar Series, centered around the iconic Indianapolis 500 race, and the developmental series Indy NXT.[6].
  • NASCAR: This is an American company that regulates and manages auto racing, primarily recognized for its involvement in stock car racing. It's regarded as one of the leading motorsports organizations globally and stands as one of the most significant spectator sports in the United States.[7].

StocksEdit

[8]
[9]
  • FWONA represents the Series A shares, which come with voting rights, whereas the FWONK shares belong to Series C and lack voting rights. FWONK shares are traded at a significantly higher volume compared to FWONA shares[10].
  • As of August 2023 the Formula One Group has a market cap of $16.33 B. This makes Formula One Group the world's 1061th most valuable company by market cap[11].
  • FWONK has become profitable over the past 5 years, growing earnings by 23.4% per year[12].
  • Formula One Group is forecasted to grow earnings and revenue by 3.1% and 11% per annum respectively. EPS is expected to grow by 5.5%. Return on equity is forecast to be 6.3% in 3 years[13].
  • Earnings vs Market: FWONK's earnings (3.1% per year) are forecast to grow slower than the US market (15.7% per year)[13].
  • Revenue vs Market: FWONK's revenue (11% per year) is forecast to grow faster than the US market (7.7% per year)[13].

DCF[14]Edit

DCFF1.png
  • Formula One Group's estimated fair value is $53.75 based on two-stage FCFF.
  • The current share price of the Formula One Group at $71.75 suggests a potential overvaluation of around 33%.
  • The analyst's price target for FWONK is set at $81.00, indicating a notable 51% increase compared to the fair value estimate.

Growth of F1[15]Edit

F1's recently renewed three-year agreement with ESPN is reportedly valued between $75 to $90 million annually, showcasing a notable increase from the current deal's $5 million per year. While this amount might seem modest when compared to the NBA's massive $2.6 billion yearly contract with Turner and ESPN, the F1 deal represents a significant step forward from its previous value. Both Amazon and Comcast also submitted bids, with rumors suggesting that Amazon's bid hovered around $100 million annually.

Starting in 2018, Formula One has witnessed a consistent rise in the average viewership per race in the United States, escalating from around half a million viewers in 2018 to nearly 1.5 million during the 2022 circuit.

Year Number of viewers per race
2018 547,722
2019 672,000
2020 608,000
2021 934,000
2022 1,400,000

The significant 47% increase just in 2021 alone has played a crucial role in boosting Formula One's financial achievements. As indicated by the latest filings, the Formula One Group managed to generate $360 million in revenue during the first quarter of 2022, marking a remarkable 100% surge compared to the corresponding period in 2021. This growth in audiences also attratcs sponsor such as SalesForce, DHL, Rolex, amaco, AWS, MSC Cruises, Qatar Airways, Liqui Moly, and Heineken.

Risks[16]Edit

  • A potential decrease in Formula 1's popularity could negatively impact its capacity to effectively utilize its commercial rights to the World Championship, potentially leading to significant adverse consequences.
  • If the 100-Year Agreements are terminated, Formula 1 could face the possibility of ceasing its operations.
  • Under specific circumstances, teams have the option to terminate their current commitment to participate in the World Championship up to and including 2025, or they might breach their obligations and withdraw.
  • F1 faces the risk of experiencing credit-related losses if the counterparties to its essential commercial contracts fail to fulfill their obligations.
  • F1 could encounter challenges when trying to expand into new markets, which might include difficulties in attracting race promoters for new events.
  • Incidents during events could lead to losses that insurance doesn't cover, potentially disrupting the event and causing reputational harm to F1.
  1. ↑ https://dcf.fm/blogs/blog/fwona-mission-vision
  2. ↑ https://en.wikipedia.org/wiki/Stefano_Domenicali
  3. ↑ https://en.wikipedia.org/wiki/Chase_Carey
  4. ↑ https://companiesmarketcap.com/formula-one-group/revenue/
  5. ↑ https://www.autoracing1.com/pl/391479/f1-series-revenue-grows-by-20-to-2-5b-for-2022/
  6. ↑ https://en.wikipedia.org/wiki/IndyCar
  7. ↑ https://en.wikipedia.org/wiki/NASCAR
  8. ↑ https://www.libertymedia.com/investors/stock-data/quote/fwonk#symbol_fwonk
  9. ↑ https://www.libertymedia.com/investors/stock-data/quote/fwona#symbol_fwona
  10. ↑ https://tickeron.com/compare/FWONA-vs-FWONK/
  11. ↑ https://companiesmarketcap.com/formula-one-group/marketcap/
  12. ↑ https://simplywall.st/stocks/us/media/nasdaq-fwon.k/formula-one-group/past
  13. ↑ 13.0 13.1 13.2 https://simplywall.st/stocks/us/media/nasdaq-fwon.k/formula-one-group/future
  14. ↑ https://simplywall.st/stocks/us/media/nasdaq-fwon.k/formula-one-group/news/formula-one-groups-nasdaqfwonk-intrinsic-value-is-potentiall
  15. ↑ https://frontofficesports.com/newsletter/the-unstoppable-rise-of-formula-1/
  16. ↑ https://www.kunalsf1blog.com/liberty-media-risk-factors-f1-business/
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