Formula One Group (FWONA): history, ownership, mission, how it works & makes money

A Brief History of Formula One Group

Overview

As of June 30, 2024, Formula One Group operates under Liberty Media Corporation and has undergone significant financial transformations and operational expansions since its acquisition in 2017.

Financial Performance

For the six months ended June 30, 2024, Formula One Group reported:

Cash Flow

Cash flow from operations for the Formula One Group during the same period was:

Stock Performance

As of June 30, 2024, the stock performance metrics include:

Operational Highlights

In 2024, Formula One introduced several new races and expanded its global reach, contributing to revenue growth. The new events included:

• Las Vegas Grand Prix
• F1 Academy Series

Debt and Liquid Assets

As of June 30, 2024, Formula One Group's cash and cash equivalents were:

Stockholder Equity

As of June 30, 2024, the stockholders' equity includes:

Challenges and Future Outlook

The Formula One Group faces challenges such as fluctuating global market conditions and regulatory changes. However, its strategic expansions and increasing popularity of Formula One racing position it well for future growth.

A Who Owns Formula One Group (FWONA)

Ownership Structure

The Formula One Group is primarily owned by Liberty Media Corporation, which holds a controlling interest through multiple classes of stock. As of June 30, 2024, the ownership structure is as follows:

Financial Performance

For the six months ended June 30, 2024, the Formula One Group reported total revenues of $1,575 million, an increase from $1,105 million in the same period of 2023.

The net earnings attributable to Liberty stockholders for the same period were $660 million, compared to $268 million for the six months ended June 30, 2023. The breakdown of net earnings by stock class is as follows:

Cash Flow and Liquidity

As of June 30, 2024, the Formula One Group had cash and cash equivalents totaling approximately $1,491 million. This includes:

For the six months ended June 30, 2024, Formula One Group reported cash provided by operating activities of $401 million, an increase from $308 million in the same period of 2023.

Debt Obligations

As of June 30, 2024, the total debt attributed to the Formula One Group was approximately $14,343 million. The breakdown of this debt includes:

Recent Developments

Liberty Media Corporation has conducted several restructuring activities, including the Split-Off of Braves Holdings in July 2023, which has impacted its overall financial structure and ownership of subsidiaries. The upcoming merger involving Sirius XM Holdings is also expected to influence the financial landscape of Liberty Media and its subsidiaries, including Formula One Group.

Formula One Group (FWONA) Mission Statement

Mission Statement Overview

The Formula One Group aims to be the world’s leading motorsport organization, delivering the most exciting and competitive racing experience while enhancing fan engagement and promoting sustainability within the sport.

Strategic Financial Goals

In alignment with its mission, Formula One Group has set ambitious financial targets to ensure growth and profitability. As of June 30, 2024, the company reported the following financial metrics:

Revenue Streams

Formula One Group's revenue is diversified across several channels, supporting its mission to enhance the sport and engage fans:

• Primary Formula 1 Revenue: $739 million (Q2 2024)
• Other Formula 1 Revenue: $132 million (Q2 2024)
• Media Rights: Increased due to contractual fee rises and growth in F1 TV subscriptions.
• Sponsorship Revenue: Increased from new sponsors and contractual fee adjustments.

Sustainability Initiatives

In line with its mission, Formula One Group is actively pursuing sustainability goals, aiming for a net-zero carbon footprint by 2030. This includes:

• Investment in clean energy technologies.
• Promotion of sustainable practices among teams and partners.
• Engagement in community programs to foster environmental awareness.

Market Position and Competitiveness

As of mid-2024, Formula One Group holds a strong position in the global motorsport market, with several strategic advantages:

• Increased fan engagement through digital platforms and enhanced viewing experiences.
• Expansion into new markets, including the Las Vegas Grand Prix and other international venues.
• Robust partnerships with leading global brands for sponsorship and media rights.

Future Outlook

Looking ahead, Formula One Group is focused on further expanding its global footprint and enhancing its competitive edge. Key initiatives include:

• Exploring new race locations and formats to attract diverse audiences.
• Leveraging technology to improve race performance and viewer engagement.
• Continuing to innovate in sustainability practices to lead the industry.

Financial Performance Summary

The financial performance of Formula One Group reflects its commitment to its mission. The following summarizes key financial data for the six months ended June 30, 2024:

Conclusion of Financial Strategy

Formula One Group’s mission is supported by its robust financial strategy, aimed at maximizing revenue while ensuring sustainable growth. The organization continues to adapt to market changes and fan expectations, solidifying its position as a leader in the motorsport industry.

How Formula One Group (FWONA) Works

Business Model

Formula One Group derives its revenue primarily from three sources: race promotion fees, media rights, and sponsorship revenue. The company earns fees from granting the rights to host Formula One races, licensing media rights for broadcasting, and securing sponsorships from various brands.

Financial Performance

As of June 30, 2024, Formula One Group reported total revenue of $1.424 billion for the six months ended June 30, 2024, compared to $1.105 billion for the same period in 2023. The breakdown of revenue is as follows:

Operating Expenses

For the same period, Formula One Group's operating expenses, excluding stock-based compensation, were as follows:

Net Earnings

Net earnings for the six months ended June 30, 2024, were reported at $752 million, up from $355 million in 2023. The earnings before income taxes were $939 million, with an income tax expense of $187 million, reflecting a significant increase in profitability.

Cash and Cash Equivalents

As of June 30, 2024, Formula One Group had cash and cash equivalents totaling $1.491 billion. The cash balances are as follows:

Market Trends and Future Outlook

In 2024, the number of races increased, contributing to higher revenues. The company hosted 11 events in the first half of the year, compared to 8 in the same period of the previous year. This increase in events is expected to drive further growth in both revenue and profitability.

Debt and Liquidity

As of June 30, 2024, the total long-term debt for Formula One Group was approximately $14.343 billion. The company maintains liquidity through cash balances and cash generated from operations. The following table summarizes the debt structure:

Stock Performance

As of June 30, 2024, Liberty Formula One common stock had a diluted earnings per share (EPS) of $0.10 for the three months ended June 30, 2024, compared to $0.41 for the same period in 2023.

Conclusion

Formula One Group continues to leverage its global brand, expanding its event calendar and exploring new revenue opportunities through media rights and sponsorships, positioning itself for sustained growth in the competitive sports entertainment industry.

How Formula One Group (FWONA) Makes Money

Revenue Streams

Formula One Group generates revenue primarily through three key streams:

• Race Promotion Fees
• Media Rights Fees
• Sponsorship Fees

In the first half of 2024, Formula One's revenue was structured as follows:

Race Promotion Fees

Revenue from race promotion fees is earned from granting rights to host and promote events. This revenue increased due to:

• More events in the calendar year.
• Contractual increases in fees.
• New Sprint and F1 Academy race fees.

Race promotion revenue increased by $121 million and $270 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.

Media Rights Fees

Media rights fees are generated from licensing broadcasting rights for events and associated services. The growth in this revenue stream was driven by:

• Increased F1 TV subscriptions.
• Contractual fee increases.
• More events leading to higher revenue recognition.

Media rights revenue saw an increase during the same periods, contributing significantly to total revenue growth.

Sponsorship Fees

Sponsorship fees come from advertising and sponsorship rights sold to various brands. The increase in this area was attributed to:

• New sponsors coming on board.
• Contractual increases from existing sponsors.
• Event-specific and season-based fees.

Sponsorship revenue also increased during the three and six months ended June 30, 2024, partly due to more events.

Other Revenue Sources

Other revenue streams include ticket sales for the Paddock Club, hospitality services, and ancillary operations related to Formula 2 and Formula 3. Other Formula 1 revenue increased by $26 million and $49 million during the three and six months ended June 30, 2024, respectively.

Cost Structure

The cost of Formula 1 revenue includes team payments and other operational costs:

The cost of Formula 1 revenue increased by $126 million and $206 million during the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023.

Net Earnings

Net earnings for the three and six months ended June 30, 2024, were:

This reflects an increase from $303 million and $355 million for the same periods in 2023, respectively.

Operating Income

Operating income for Formula One Group was as follows:

This compares to $72 million and $107 million for the same periods in 2023.

Conclusion

Formula One Group's financial performance in 2024 showcases robust revenue growth across its primary streams, driven by increased events, media rights, and sponsorships. While costs have also risen, the overall impact has resulted in significant gains in net earnings and operating income.