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Formula One: The road to ruin or [even more] riches?

Formula One: The road to ruin or [even more] riches?

Summary

This report focuses on the Formula One business in order to understand its underlying structure and operating format with a view to demonstrating the complexities involved in running a large-scale and highly scrutinized organization.

Key Findings

Overview of the Formula One business and its deal history.

Company structure diagram including detailed analysis of money flows.

Provides an understanding of key agreements between the various parties involved in the Formula One industry.

Strategic analysis of Formula One governance and market structure.

Reasons To Buy

How is money made in the Formula One industry and where does that money go?

What deals have been made between race teams, competition organizers and regulators?

How could the business be improved and are there further market opportunities?

Key Highlights

The Formula One group is able to bring in $1.7bn in commercial rights exploitation and associated revenues.

The legacy premium and bonus payments intended to keep older and prestigious teams in the Championship are deemed by many fans and smaller teams to be entirely disproportional and unfair.

The FIA has managed to obtain a 1% stake in the F1 Group and therefore has an interest in the commercial success of the sport, not just the way it is regulated and conducted.


>Overview
Catalyst
Summary
Anatomy of F money-making machine
Complex structure of empire built by Ecclestone reaps rewards of FIA deal
CVC Capital Partners holds major stake but Ecclestone runs the show
Ecclestone and family trust still hold sizable combined share in F
Historic share deals taint integrity of business and add to mystery of the F brand
Loops of loans invite further speculation and controversy
Two deals make a billion dollar business
Commercial rights and Concorde Agreement vital to success
Formula One World Championship Ltd holds key to commercial rights exploitation
Concorde Agreement reinforces strength of biggest teams
F governance risks alienating audiences
Teams unwilling to compromise in FIA and F Group monopoly
FIA rule-bending and creation of F strategy group increase dominance of powerful
Constant rule changes appear ill thought out and divisive in poorly governed system
Business risks outweighed by lack of competition and barriers to entry
Conclusions
Spectacle failure, insider success
Appendix
Sources
Further Reading
Ask the analyst
About MarketLine
Disclaimer
List of Tables
Table 1: Estimated team payments made by FOWC, $m, FY2014
List of Figures
Figure 1: The dominant Mercedes race car, 2016
Figure 2: Estimated Delta Topco Limited group structure and money flows, $m, FY2014
Figure 3: Bernie Ecclestone, F1 Group Chief Executive Officer

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