Formula one is a big money business. It costs money to build or construct circuits, organize and host races across the world. F1 tracks are an integral part of this sport. The question begs; how do F1 track owners make money?
To get to this answer, you should understand how formula one works. It includes learning how formula one makes money, or rather how F1 circuits generate an income or revenues.
Formula one as a sport requires facilities to make racing possible. One of the key components of F1 racing is availability of a track or circuit.
Building an F1 track is not cheap. It costs millions or billions of dollars to construct and set up all installation at the circuit.
This investment is made by the owners of the track or circuit.
As you will learn, the ownership structure of an F1 track depends on the host country or city.
For example, Silverstone circuit in the UK is owned by the BDRC. They run, manage and maintain the track.
In this article, I will help you understand how F1 track owners make money.
This means we are going to look into how F1 tracks make money, and whether they make profits or losses from their operations.
How Do F1 Track Owners Make Money?
Investing in any business or facility is all about the return on the investment. As an investor, you are looking for a positive return on your investment.
F1 track owners make money through;
- Ticket sales
- Hospitality packages
These are the major ways F1 tracks generate money for the owners in the current season.
You should note that other income sources are paid to and managed by Liberty Media, who own the right for the formula one management.
How Are F1 Tracks Making Money This Season?
As the F1 season continues to unfold this year, tracks continue to make money.
Records show that F1 is making more money, and continues to attract bigger sponsors.
This is good news for the sport.
As the fans troop back to the circuits this year, it is expected that circuits will generate more income from tickets or hospitality deals.
Increased publicity also means the track owners will or might attract other auxiliary events. These additional events would increase the amount of money generated by the track.
For example, Silverstone Circuit brought a record 400,000 fans over the race weekend.
It is expected the French Grand Prix would attract high numbers of fans as well this year.
This has been the trend across the F1 tracks, meaning the owners expect to make more money this year.
Are F1 Tracks Privately Owned?
The ownership of formula one track is an interesting topic.
Some circuits are privately-owned, while others are public facilities constructed by national or local governments.
The owners of the tracks build them in the hope of an economic return on their investment.
It could be in terms of profits for private investors, or national or regional economic good.
In conclusion, the business of formula one is lucrative. There is money to be made from the sport, including providing track facilities.
So, how do F1 track owners make money? That is a good question.
Formula one track or circuits generate money for the owners in ticket sales and from hospitality solutions.
However, not all tracks make money or rather turn a profit. Some make losses and have to be bailed out by the host national or local government.
This happens because revenue is less than the expenses incurred managing or maintaining the circuit over the course of a year.
Track owners can implement ideas or strategies to increase the revenues from the track. More revenues would mean making more money.
In some instances, this is allowed because of the other benefits of hosting F1 races in a country or city.
As an F1 fan, I hope you now understand how tracks or circuits make money for the people who own them.
If you are an investor, you need to do research and establish there is commercial benefit to constructing or rehabilitating an F1 racing circuit.