Formula One Group (FWONA): Business Model Canvas [10-2024 Updated]

Formula One Group (FWONA) is not just a racing organization; it’s a global entertainment powerhouse that thrives on speed, technology, and fan engagement. This blog post delves into the Business Model Canvas of Formula One, highlighting its key components such as partnerships, activities, and revenue streams. Discover how FWONA captivates millions of motorsport fans while driving innovation and revenue across diverse segments. Read on to uncover the intricate workings behind this iconic brand.

Formula One Group (FWONA) - Business Model: Key Partnerships

Race promoters and organizers

Formula One collaborates with various race promoters and organizers across the globe to host its events. The race promotion fees are a critical revenue stream, accounting for a significant portion of Formula 1's total revenue. For the six months ended June 30, 2024, race promotion revenue increased due to the additional events on the calendar, with three more events compared to the prior year. The total primary Formula 1 revenue for this period was $1,202 million, reflecting an increase of $270 million year-over-year.

Media partners for broadcasting rights

Media rights are another essential component of the Formula One business model. The broadcasting rights generate substantial income, and for the six months ended June 30, 2024, media rights revenue increased due to contractual increases in fees and growth in F1 TV subscriptions. The total media rights revenue contributed to the overall primary Formula 1 revenue of $1,202 million during this period.

Sponsors and advertisers

Sponsorships and advertising partnerships significantly enhance Formula One's financial stability. The company reported an increase in sponsorship revenue during the six months ended June 30, 2024, with contributions from new sponsors and contractual increases from existing sponsors. Total sponsorship revenue growth was part of the overall revenue increase of $270 million for the primary Formula 1 revenue during this period.

Technical partners for vehicle development

Technical partnerships are vital for the innovation and performance of Formula One vehicles. Collaborations with automotive manufacturers, technology firms, and engineering companies ensure the continuous development of competitive race cars. The costs related to vehicle development and technical services are accounted for under the cost of Formula 1 revenue, which was reported at $931 million for the six months ended June 30, 2024, an increase from $725 million during the same period in 2023.

Regulatory bodies like FIA

Formula One operates under the regulations set forth by the Fédération Internationale de l'Automobile (FIA). The FIA ensures compliance with safety and competition standards, which is crucial for the legitimacy and safety of the sport. Regulatory fees paid to the FIA are included in the overall costs associated with Formula 1 revenue, contributing to the operational framework within which Formula One operates.

Partnership Type	Details	Financial Impact
Race Promoters	Collaboration for event hosting and promotion	Primary Formula 1 revenue: $1,202 million for H1 2024
Media Partners	Broadcasting rights and media revenue	Contributing to total primary revenue growth
Sponsors	Advertising and sponsorship partnerships	Significant revenue increase in H1 2024
Technical Partners	Collaboration for vehicle development	Cost of Formula 1 revenue: $931 million for H1 2024
Regulatory Bodies	Compliance with FIA regulations	Included in overall operational costs

Formula One Group (FWONA) - Business Model: Key Activities

Organizing and promoting racing events

Formula One Group organizes and promotes racing events across a global calendar. For the 2024 season, there are scheduled to be 24 events, an increase from the previous year’s adjusted total of 22 events due to the cancellation of the Emilia-Romagna Grand Prix in 2023. The revenue generated from race promotion fees is a significant part of the overall income, which includes fees from race promoters for hosting and promoting these events.

Managing media rights and broadcasting

The management of media rights is crucial for Formula One's revenue stream. For the six months ended June 30, 2024, media rights revenue contributed significantly to the overall income. The total Formula 1 revenue for the same period was $1.424 billion, with primary Formula 1 revenue at $1.202 billion. The company has seen an increase in media rights revenue due to contractual fee increases and growth in F1 TV subscriptions, reflecting the high demand for broadcasting rights.

Engaging with sponsors and advertisers

Sponsorship and advertising are core to Formula One's business model. The company reported that sponsorship revenue increased by $121 million during the three months ended June 30, 2024, compared to the same period in the prior year. This growth is attributed to new sponsorship contracts and contractual increases from existing sponsors, highlighting the strategic importance of these relationships in driving revenue.

Conducting marketing and promotional activities

Marketing and promotional activities are essential for maintaining and enhancing the Formula One brand. The organization invests in various marketing campaigns to engage fans and promote events. Selling, general and administrative expenses, which include marketing costs, were reported at $66 million for the three months ended June 30, 2024, up from $50 million in the same period of 2023. This increase reflects a more aggressive marketing approach to enhance brand visibility and engagement.

Developing technical standards and regulations

Formula One is responsible for establishing and enforcing technical standards and regulations that govern the sport. The company incurs costs related to regulatory compliance, including fees payable to the Fédération Internationale de l'Automobile (FIA). The costs associated with these activities were part of the overall operational expenses, which totaled $1.030 billion for the six months ended June 30, 2024. These regulations are critical for ensuring fair competition and maintaining the integrity of the sport.

Key Activity	Details	Financial Impact (2024)
Organizing Racing Events	24 scheduled events	Revenue from race promotion fees included in total $1.424 billion revenue
Media Rights Management	Broadcasting rights and F1 TV subscriptions	Contributed to part of $1.202 billion primary revenue
Sponsorship Engagement	Contracts with new and existing sponsors	Sponsorship revenue increased by $121 million in Q2 2024
Marketing Activities	Promotional campaigns and fan engagement	SG&A expenses of $66 million in Q2 2024
Technical Standards Development	Regulatory compliance and standards setting	Part of operational expenses totaling $1.030 billion

Formula One Group (FWONA) - Business Model: Key Resources

Exclusive rights to Formula 1 events

The Formula One Group holds exclusive rights to organize and promote Formula 1 races worldwide. This includes the rights to host 23 races in the 2024 calendar, which is a record number of events for the championship.

Brand equity and global recognition

As of 2024, Formula 1 is recognized as one of the most prestigious motorsport brands globally. The brand's equity is reflected in its high media visibility and fan engagement, with a reported global fan base of over 500 million people and a continuous growth in its digital and social media presence.

Financial resources from sponsorships and media rights

In the first half of 2024, Formula 1 generated approximately $739 million in primary revenue, a significant portion of which comes from sponsorships and media rights. The breakdown of this revenue includes:

Revenue Source	Q2 2024 Revenue (in millions)
Media Rights	$300
Sponsorships	$250
Race Promotion	$189

Technical expertise in motorsports

Formula 1 possesses extensive technical expertise in motorsports, which is crucial for maintaining competitive performance standards. The organization employs approximately 1,500 skilled professionals, including engineers, mechanics, and support staff, ensuring the highest level of technical capability and innovation in vehicle design and race strategy.

Strong partnerships with teams and manufacturers

The Formula One Group has established strong partnerships with various teams and manufacturers, which are essential for its operational success. In 2024, the total payments to teams reached $598 million, reflecting the shared revenue model that supports team sustainability and competitiveness within the sport.

Formula One Group (FWONA) - Business Model: Value Propositions

High-octane racing entertainment

Formula One (F1) provides unparalleled racing entertainment with a global fan base. The 2024 World Championship calendar is set to feature 24 Events, showcasing high-speed races that attract millions of viewers worldwide. In the first half of 2024, F1 revenue reached $1.403 billion, a significant increase from $1.105 billion in the same period of 2023 .

Global visibility for sponsors

F1 offers extensive advertising and sponsorship opportunities. In 2024, sponsorship revenue increased by $121 million compared to the previous year, driven by new sponsorship deals and contractual fee increases . Major brands leverage F1's global platform, which garners an audience of over 400 million viewers annually, ensuring substantial visibility for their products and services.

Unique fan engagement experiences

F1 enhances fan engagement through various initiatives, including the F1 Paddock Club, which offers high-end hospitality experiences. The revenue from other Formula 1 activities, which includes hospitality and fan experiences, increased to $222 million in the first half of 2024, up from $173 million in 2023 . The introduction of F1 TV, a subscription-based service, further enriches the fan experience, contributing to the overall revenue growth.

Cutting-edge technology and innovation in racing

F1 is at the forefront of automotive technology, constantly innovating to enhance performance and safety. The sport invests heavily in R&D, with a focus on sustainable technologies. In 2024, Formula 1's operating income reached $220 million, reflecting its commitment to innovation and efficiency . The introduction of hybrid power units and a push towards net-zero carbon emissions by 2030 exemplify F1's leadership in technological advancement.

Access to a dedicated global fan base

F1 boasts a dedicated global fan base that spans multiple demographics. The total F1 revenue in the first half of 2024 was $1.424 billion, with a growing number of fans engaging through digital platforms . The consistent increase in F1 TV subscriptions reflects the sport's ability to attract and retain fans, providing sponsors and partners with access to a highly engaged audience.

Value Proposition	Key Metrics
High-octane racing entertainment	24 Events scheduled for 2024; Revenue of $1.403 billion in H1 2024
Global visibility for sponsors	$121 million increase in sponsorship revenue
Unique fan engagement experiences	Revenue from other activities: $222 million in H1 2024
Cutting-edge technology and innovation in racing	Operating income of $220 million in H1 2024
Access to a dedicated global fan base	Total revenue of $1.424 billion in H1 2024

Formula One Group (FWONA) - Business Model: Customer Relationships

Engaging fans through digital platforms

Formula One Group engages fans through various digital platforms, significantly increasing its online presence. As of June 30, 2024, the total number of F1 TV subscribers reached approximately 1.7 million, reflecting a substantial growth in digital engagement. The company reported a revenue increase of $121 million in primary Formula 1 revenue during the three months ended June 30, 2024, driven by digital content and media rights.

Offering exclusive content via F1 TV

F1 TV provides exclusive streaming content, including live races, team radios, and behind-the-scenes footage. The growth in subscription revenue for F1 TV has been notable, contributing to a media rights revenue increase of 16% year-over-year. During the six months ended June 30, 2024, F1 TV subscription revenue accounted for approximately $132 million of the total revenue.

Providing customer service and support at events

Customer service and support during live events are critical for enhancing fan experiences. The Formula One Group allocates significant resources to ensure customer satisfaction at race events, which includes a dedicated support team and real-time assistance through mobile apps. As of June 2024, the group reported hosting 11 events, with customer service initiatives improving overall attendee satisfaction ratings to over 90%.

Building loyalty through membership programs

The F1 Paddock Club and other membership programs have been key in building customer loyalty. Membership benefits include exclusive access to premium hospitality, pit lane walks, and meet-and-greet opportunities with drivers. Revenue from membership programs increased by 25% in the first half of 2024, amounting to approximately $49 million.

Enhancing experiences with hospitality offerings

Formula One offers various hospitality experiences, such as the Paddock Club, which provides premium access to races. The revenue from hospitality offerings saw an increase of $26 million during the three months ended June 30, 2024, driven by heightened demand for exclusive experiences at events like the Las Vegas Grand Prix.

Customer Relationship Type	Data Points	Revenue Impact (2024)
F1 TV Subscribers	1.7 million	$132 million
Customer Satisfaction Rating	90%	N/A
Paddock Club Revenue Increase	25%	$49 million
Hospitality Offering Revenue Increase	$26 million	$26 million

Formula One Group (FWONA) - Business Model: Channels

Official Formula 1 website and app

The official Formula 1 website and app serve as key digital channels for engaging with fans. As of 2024, the website attracts over 60 million unique visitors per month, while the app has been downloaded more than 25 million times. These platforms offer real-time race updates, news, and exclusive content, contributing significantly to the brand's digital footprint.

Broadcast television networks

Formula 1 has established extensive partnerships with major broadcast networks globally. In the United States, F1 races are broadcast on ESPN, which has seen a 15% increase in viewership during the 2023 season compared to the previous year. The average viewership per race reached approximately 1.5 million in the U.S. alone. Additionally, F1 secured broadcasting agreements with networks across Europe, Asia, and the Americas, ensuring a broad reach of over 400 million viewers worldwide.

Social media platforms for engagement

Social media is a vital channel for Formula 1, with a combined following of over 50 million across platforms like Instagram, Twitter, and Facebook. Engagement rates have increased, with Instagram posts averaging 200,000 likes and Twitter interactions reaching 1 million per race weekend. These platforms are used for promoting events, sharing highlights, and engaging with fans directly.

Live events and race day experiences

Live events are central to the Formula 1 experience, with the 2024 season featuring 23 races across various countries. Ticket sales for the 2024 season have generated approximately $300 million in revenue, with the average ticket price for a Grand Prix around $200. The Las Vegas Grand Prix, a recent addition, has proven particularly lucrative, selling out its premium hospitality packages at prices exceeding $10,000 per person.

Merchandise sales through various outlets

Merchandise sales represent a significant revenue stream for Formula 1, with total merchandise revenue estimated at $150 million in 2024. The official online store has reported a 25% increase in sales year-over-year, driven by a surge in demand for team merchandise. Additionally, partnerships with retail outlets and e-commerce platforms have expanded the availability of products, contributing to a growing global fan base.

Channel	Key Metrics	Revenue Impact
Official Website and App	60 million monthly visitors, 25 million app downloads	N/A
Broadcast Television	15% viewership increase, 1.5 million average U.S. viewers	N/A
Social Media	50 million followers, 200,000 average likes per post	N/A
Live Events	23 races, $300 million in ticket sales	$300 million
Merchandise Sales	$150 million in revenue, 25% year-over-year growth	$150 million

Formula One Group (FWONA) - Business Model: Customer Segments

Motorsports fans globally

Formula One has a vast global audience, with an estimated 500 million fans worldwide. The demographic is diverse, spanning various age groups and geographic locations, with a significant presence in Europe, Asia, and the Americas. The interest in Formula One is driven by thrilling races, advanced technology in cars, and the allure of high-speed competition.

Corporate sponsors and partners

In 2024, Formula One generated approximately $739 million in primary revenue from sponsorships. Major corporate sponsors include brands like Pirelli, Heineken, and Mercedes-Benz. These sponsors benefit from significant brand exposure during races, including on-car advertising, hospitality packages, and digital marketing opportunities. The sport is known for high-profile partnerships that align with luxury and performance-oriented brands.

Media companies seeking broadcasting rights

Formula One's media rights revenue in 2024 increased due to contractual increases and the addition of new broadcasting partners. The total media rights revenue was part of the $1.424 billion total revenue for the first half of 2024. The sport has secured broadcasting agreements with major networks including ESPN in the United States and Sky Sports in the UK, ensuring extensive global reach and viewership.

Teams and drivers within the championship

Formula One consists of 10 teams, each with two drivers, competing in the championship. As part of the business model, teams receive payments based on their performance and participation. Team payments totaled $435 million for the three months ended June 30, 2024, reflecting an increase from $344 million in the same period in 2023. This revenue structure incentivizes teams to perform well, contributing to the overall competitiveness of the championship.

Hospitality clients and event attendees

Formula One offers premium hospitality services at each race, significantly contributing to its revenue stream. In the first half of 2024, other Formula 1 revenue, which includes hospitality and ticket sales, amounted to $222 million. The Paddock Club, an exclusive hospitality offering, provides fans with luxury experiences, including gourmet dining and meet-and-greet opportunities with drivers. The demand for such experiences continues to grow, enhancing the overall fan experience and engagement with the sport.

Customer Segment	Estimated Revenue (2024)	Key Characteristics
Motorsports fans globally	N/A	500 million fans, diverse demographics
Corporate sponsors and partners	$739 million	High-profile brands, luxury and performance alignment
Media companies	Part of $1.424 billion total revenue	Broadcasters like ESPN and Sky Sports
Teams and drivers	$435 million (team payments)	10 teams, competitive performance-based payments
Hospitality clients and event attendees	$222 million (hospitality and ticket sales)	Exclusive experiences, Paddock Club offerings

Formula One Group (FWONA) - Business Model: Cost Structure

Costs associated with organizing races

The costs incurred in organizing races include expenses related to venue rentals, security, logistics, and local government fees. For the three months ended June 30, 2024, the total cost of Formula 1 revenue was $645 million, which included significant costs associated with the Las Vegas Grand Prix and other key events .

Payments to teams and drivers

Payments made to teams and drivers represent a substantial portion of the Formula One Group's expenses. For the same period, team payments amounted to $435 million for the three months and $598 million for the six months ended June 30, 2024, reflecting an increase from $344 million and $456 million respectively in the previous year .

Marketing and promotional expenses

Marketing and promotional expenses are critical for maintaining the brand's global presence. The Formula One Group reported selling, general, and administrative expenses of $66 million for the three months ended June 30, 2024, an increase from $50 million in the prior year. This increase is attributed to higher personnel and information technology costs .

Operational costs for event management

Operational costs for event management include staffing, logistics, and other miscellaneous expenses. The total operational costs, including team payments and other costs of Formula 1 revenue, reached $645 million in Q2 2024, up from $519 million in Q2 2023 .

Infrastructure and technology investments

Investments in infrastructure and technology are essential for the Formula One Group to ensure the smooth operation of races and enhance fan engagement. The company allocated approximately $387 million for capital expenditure related to property and equipment, including technology enhancements .

Cost Category	Q2 2024 (in millions)	Q2 2023 (in millions)	Six Months 2024 (in millions)	Six Months 2023 (in millions)
Team Payments	$435	$344	$598	$456
Other Costs of Formula 1 Revenue	$210	$175	$333	$269
Total Cost of Formula 1 Revenue	$645	$519	$931	$725
Selling, General & Administrative Expenses	$66	$50	$125	$108
Capital Expenditures	$387	$544	$387	$544

Formula One Group (FWONA) - Business Model: Revenue Streams

Race promotion fees from event organizers

The Formula One Group earns race promotion fees from event organizers for granting the rights to host and promote each event on the World Championship calendar. For the six months ended June 30, 2024, primary Formula 1 revenue, which includes race promotion fees, amounted to $1,202 million, an increase from $932 million in the same period in 2023.

Media rights fees from broadcasters

Media rights fees are a significant source of revenue for Formula One, generated from licensing the broadcasting rights for events. In the first half of 2024, media rights revenue contributed to the primary Formula 1 revenue growth, with a total of $739 million reported for the second quarter alone. The growth was driven by contractual increases and an increase in F1 TV subscriptions.

Sponsorship revenue from various brands

Sponsorship revenue is another vital revenue stream, encompassing fees from brands for advertising and sponsorship rights. During the six months ended June 30, 2024, sponsorship revenue increased significantly, contributing to a total of $1,424 million in total Formula 1 revenue. This increase was attributed to new sponsorship deals and contractual fee increases from existing sponsors.

Ticket sales and hospitality packages

Ticket sales and hospitality packages form an essential part of the revenue model. For the six months ended June 30, 2024, the Formula One Group generated $222 million from other revenue sources, which includes ticket sales, hospitality packages, and the operation of the Formula 2 and Formula 3 series. The rise in events contributed to higher sales figures in this category.

Merchandise and licensing income

Merchandise and licensing income include revenue from selling branded merchandise and licensing agreements. In the first half of 2024, Formula One reported $132 million from other Formula 1 revenue, which encompasses merchandise sales and licensing. This reflects an increase from $106 million in the same period in 2023.

Revenue Stream	Q2 2024 Revenue (in millions)	Q2 2023 Revenue (in millions)	Change (in millions)
Race Promotion Fees	$739	$618	$121
Media Rights Fees	$739	$618	$121
Sponsorship Revenue	$1,424	$1,105	$319
Ticket Sales & Hospitality	$222	$173	$49
Merchandise & Licensing	$132	$106	$26