How Liberty Media Made F1 Profitable After Decades

In 2016, Formula 1 was dying. TV viewership had dropped 40% since 2008. Bernie Ecclestone, the sport’s 86-year-old CEO, famously dismissed social media as “nonsense” and said he wasn’t interested in young fans because “most of these kids haven’t got any money.” Teams were going bankrupt. The racing was predictable. F1 was stuck in the 1990s while the world moved on.

Then Liberty Media walked in with $4.4 billion and a plan.

Fast forward to 2024: F1 generated $3.41 billion in revenue, more than double what it made in 2016. Operating profit hit $791 million. The sport has 1.6 billion cumulative TV viewers and 97 million social media followers. Fan attendance reached 6.5 million in 2024, up 9% from the year before. The average F1 team is now worth $1.88 billion, a 276% increase in just four years.

Liberty Media turned F1 from a declining European motorsport into a global entertainment empire. Here’s exactly how they did it.

The Problem Liberty Media Inherited

F1 Was Hemorrhaging Fans and Money

When Liberty Media agreed to acquire F1 in September 2016, the sport was in crisis. Bernie Ecclestone had controlled F1’s commercial rights for 40 years, and his old-school approach had left the sport unable to compete in the digital age.

The numbers told a brutal story.

In 2016, F1 had 40% fewer TV viewers than in 2008. Annual revenue had stagnated at around $1.5 billion. Smaller teams were on the verge of bankruptcy, and even mid-tier teams like Lotus needed emergency buyouts to survive.

F1 had no formal marketing department. No digital strategy. No social media presence worth mentioning. The sport’s previous owner, private equity firm CVC Capital Partners, had extracted $4.5 billion in profits while investing almost nothing back into growth.

Bernie Ecclestone’s business model was simple: sell TV rights to the highest bidder, charge countries massive fees to host races, and let teams figure out their own sponsorships. The problem? This approach maximized short-term profit while gutting long-term growth.

Ecclestone’s infamous quotes captured the mindset.

On social media in 2014: “I don’t know why people want to get to the so-called ‘young generation’. Why do they want to do that? Is it to sell them something? Most of these kids haven’t got any money. I’m not interested in tweets, Facebook and whatever this nonsense is. I’d rather get to the 70-year-old guy who’s got plenty of cash.”

That philosophy worked in the 1980s and 1990s when F1 was Europe’s premier motorsport. By 2016, it was killing the business.

F1 was moving races behind expensive paywalls in major markets. In the UK, F1 would disappear from free-to-air TV completely by 2019. Countries were getting priced out of hosting races. The racing itself had become predictable, with Mercedes winning 51 of 59 races between 2014 and 2016.

Liberty Media saw an opportunity. They bought F1’s equity for $4.4 billion in 2017, implying an enterprise value of $8 billion.

In January 2017, Liberty completed the takeover. Chase Carey became CEO. Bernie Ecclestone was given the title “Chairman Emeritus,” a role he admitted he’d never heard of and one that came with no real power.

F1’s transformation began immediately.

Strategy 1: Netflix and the American Audience

Drive to Survive Changed Everything

Liberty Media identified the biggest problem first: F1 had failed to crack the United States, the world’s largest sports media market.

Before Liberty’s takeover, F1 had no formal marketing or promotion departments. Sean Bratches, F1’s new Managing Director of Commercial Operations, had a radical idea: create a behind-the-scenes Netflix documentary to humanize drivers and teams.

In March 2019, Formula 1: Drive to Survive premiered on Netflix.

The results were immediate and massive.

US viewership exploded

• 2018 (pre-Drive to Survive): 547,000 viewers per race
• 2019 (Drive to Survive Season 1): 672,000 viewers (18% increase)
• 2021 (Season 3): 946,000 viewers (41% higher than 2019)
• 2022 (Season 4): 1.3 million viewers per race (40% higher than 2021)

The 2022 Miami Grand Prix averaged 2.6 million viewers, the most ever in the US for a live F1 telecast.

Nielsen analyzed the show’s impact and found that more than 360,000 viewers who didn’t watch F1 in late 2021 started watching F1 races in 2022 after first watching Drive to Survive. Another study showed 41% of Drive to Survive viewers tuned into the first three weeks of the new F1 season.

The show attracted a younger, more diverse, and more affluent audience. Drive to Survive viewers were 46% under age 34 (compared to 16% of traditional F1 viewers), 23% Hispanic (vs 12%), and 69% earning over $100,000 annually (vs 49%).

The commercial impact was staggering

ESPN originally paid $5 million annually for US broadcasting rights in 2019. By 2022, ESPN was paying $75-90 million annually, a 1,500% increase in just three years.

Raceday ticket sales for the first US Grand Prix after Drive to Survive’s debut rose 15%. The 2021 US Grand Prix in Austin became one of F1’s biggest races of all time, with a 50% increase in spectators.

Liberty Media’s investment in Netflix paid off beyond their wildest expectations. McLaren CEO Zak Brown called Drive to Survive “the single most important impact in North America.”

Between 2020 and 2022, the share of Americans who identified as F1 fans increased 33%. More than half of F1 fans (53%) said Drive to Survive played a role in their becoming a fan, including 30% who said it was a major reason.

What made Drive to Survive work

The show didn’t just focus on Max Verstappen and Lewis Hamilton winning races. It showed team principals screaming into radios, engineers working through the night on car upgrades, and drivers dealing with the pressure of multi-million-dollar contracts.

It turned F1 from a sport about cars into a sport about people. Guenther Steiner, team principal of Haas F1 Team, became a fan favorite despite running the slowest team on the grid.

Liberty Media understood something CVC and Bernie Ecclestone never did: you don’t need to be an expert to enjoy drama, tension, and compelling characters. Drive to Survive made F1 accessible to casual fans while keeping hardcore fans engaged with the racing itself.

Strategy 2: Digital Transformation and Social Media

Building a 97 Million Follower Audience

Before Liberty Media, F1’s digital presence was nearly nonexistent. Bernie Ecclestone actively resisted social media and digital platforms, believing they would cannibalize TV rights revenue.

Liberty immediately hired executives with media and entertainment backgrounds. They created formal marketing, sponsorship, and digital departments. They overhauled F1’s branding, introduced a new logo, and commissioned composer Brian Tyler to create a new theme song.

Most importantly, they embraced social media.

The results speak for themselves

• 2017: 18 million social media followers across all platforms
• 2024: 97 million followers (439% growth)

F1 launched F1 TV, a direct-to-consumer streaming platform that grew 15% in 2024 alone. The service is now available in 87 territories, with the US as the largest market.

Liberty invested heavily in short-form content, highlight reels, and behind-the-scenes footage optimized for Instagram, TikTok, and YouTube. They gave fans access to team radios, onboard cameras, and real-time data during races.

The sport also embraced esports and gaming. During the COVID-19 pandemic, F1 ran a Virtual Grand Prix series featuring real drivers competing online. The series attracted millions of viewers and introduced F1 to a younger demographic.

Nielsen data showed F1 gained 73 million fans (a 20% increase) in 2020-2021 across ten key territories. The sport was on track to hit 1 billion people taking an interest by 2022.

Liberty Media’s digital strategy wasn’t just about posting on social media. It was about creating a year-round content machine that kept fans engaged between races.

Key moves included

• Uploading classic races and highlights to YouTube
• Giving media partners permission to share clips and highlights
• Creating driver-focused content for TikTok and Instagram Reels
• Launching F1 Experiences, a premium hospitality and travel service
• Partnering with influencers and content creators

The average age of F1’s TV viewers dropped from 44 to 32. The share of fans aged 16-35 increased from 40% to 46% between 2019 and 2022.

Strategy 3: The Cost Cap and Competitive Balance

Ending Mercedes’ Domination

Liberty Media faced a fundamental problem: the racing was boring.

Between 2014 and 2016, Mercedes won 51 of 59 races. The same three teams (Mercedes, Ferrari, Red Bull) finished on the podium 90% of the time. Smaller teams couldn’t compete because they were outspent 3-to-1.

Before 2021, top teams like Mercedes and Ferrari spent over $400 million per season. Teams like Haas and Williams operated on budgets under $150 million. This spending gap created a performance gap that was impossible to close.

In 2021, Liberty Media introduced F1’s first-ever cost cap.

The cap limits

• 2021: $145 million per team
• 2022: $140 million
• 2023-2025: $135 million

The cap covers most team expenses, including salaries (except drivers), car development, race weekend costs, and transport. It excludes engine costs for customer teams and power unit development for factory teams.

The impact was immediate

In the 2019 Canadian Grand Prix (pre-cost cap), the gap between the top 10 cars in qualifying was over 3.7 seconds. In the 2023 Canadian Grand Prix (post-cost cap), the gap was just 0.8 seconds.

Seven different teams won races in 2021, compared to just three teams in 2019. The 2021 season produced one of the most competitive championships in F1 history, with Max Verstappen and Lewis Hamilton tied on points going into the final race.

The cost cap also made F1 teams more investable. Liberty Media CEO Greg Maffei told CNBC: “When we got involved, literally, the bottom teams were being traded for zero. Today I don’t think you could buy a team for less than $750 million.”

Why it worked

The cost cap didn’t just limit spending. It forced teams to prioritize smarter engineering over brute-force spending. Teams couldn’t just throw money at problems anymore.

It also made team balance sheets more predictable. Before the cost cap, a team’s spending could swing wildly based on performance. Now, every team knew exactly how much they needed to compete.

Haas F1 Team’s principal Guenther Steiner said the cost cap made it easier to attract sponsors: “Because of the testing restrictions and the budget cap, it’s now difficult to take a driver out of America who maybe hasn’t been around these tracks. But it also means we’re a profitable sports team. A lot of that is performance-based, and a lot of credit to Liberty that when they came in they established a cost cap.”

Not everyone was happy. Some teams tried to exploit loopholes. In 2022, Red Bull was found to have overspent by $1.86 million in 2021, resulting in a $7 million fine and a 10% reduction in wind tunnel testing time.

But overall, the cost cap achieved its goal: making F1 more competitive and financially sustainable.

Strategy 4: Expanding the Calendar and Maximizing Revenue

From 21 Races to 24, With Three in the US

Liberty Media didn’t just want more fans. They wanted more races, more sponsors, and more revenue streams.

The calendar expansion:

• 2017: 20 races
• 2024: 24 races (a record)

Most importantly, Liberty doubled down on the United States. In 2024, F1 had three US races: Austin, Miami, and Las Vegas.

The Las Vegas Grand Prix was Liberty’s masterstroke

In November 2023, F1 launched the Las Vegas Grand Prix on the Strip. Unlike most F1 races (where a local promoter pays F1 for hosting rights), Liberty Media owned and operated the Las Vegas race directly.

The move was risky. F1 built a 39-acre paddock, invested hundreds of millions in infrastructure, and took full financial responsibility for the event.

It paid off. The Las Vegas Grand Prix generated massive revenue from ticket sales, hospitality, and sponsorships. The race was broadcast in prime time (8 PM local time) to maximize US viewership.

Liberty also secured lucrative race hosting deals worldwide:

• Chinese Grand Prix extended through 2030
• Italian Grand Prix (Monza) and Monaco Grand Prix extended through 2031
• Saudi Arabia signed a 10-year, $900 million deal ($90 million per year)

Race promotion fees now account for 29.3% of F1’s total revenue. Media rights make up 32.8%, and sponsorships contribute 18.6%.

Sponsorship growth

Liberty Media renegotiated and expanded sponsorships, attracting brands that had never been involved in F1:

• Crypto.com signed as title sponsor through 2030
• Allwyn (global lottery operator) signed as Official Partner
• Heineken, Rolex, Emirates, DHL, and Aramco all extended deals

Sponsorship revenue grew 46% between 2022 and 2024.

The Financial Results: Doubling Revenue in 7 Years

From $1.5 Billion to $3.41 Billion

Let’s look at the numbers.

F1 revenue growth under Liberty Media:

• 2016 (pre-Liberty): $1.5 billion
• 2017 (Liberty’s first year): $1.8 billion
• 2021: $2.1 billion 2024: $3.41 billion

That’s a 127% increase in eight years.

Operating profit:

• 2023: $725 million
• 2024: $791 million (9% growth)

Media rights revenue:

• 2017: $606.6 million
• 2024: $1.18 billion (95% increase)

F1’s enterprise value:

• 2017: $8 billion
• 2023: $17.1 billion (114% growth)

Team valuations:

Pre-Liberty: Bottom teams were “traded for zero,” according to Liberty CEO Greg Maffei

2024: Average team value is $1.88 billion (276% increase in four years)

• Ferrari: $3.9 billion
• Mercedes: $3.8 billion

Even struggling teams like Alpine are now worth $900 million

Fan engagement:

• 2024 attendance: 6.5 million fans (9% higher than 2023)
• 1.6 billion cumulative TV viewers in 2024
• 97 million social media followers (up from 18 million in 2017)

US market growth:

• 2018: 547,000 viewers per race
• 2024: Over 1 million viewers per race

ESPN went from paying $5 million/year to $75-90 million/year for broadcast rights

Liberty Media’s strategy worked. They turned F1 from a niche European sport into a global entertainment brand.

What Liberty Did That Bernie Ecclestone Couldn’t

Entertainment Over Tradition

Bernie Ecclestone ran F1 like a private fiefdom. He negotiated TV deals in secret, kept the sport behind paywalls, and dismissed digital platforms. He prioritized short-term profits over long-term growth.

Liberty Media, led by Chase Carey and later Stefano Domenicali, took the opposite approach.

Liberty’s philosophy

• F1 isn’t just a sport. It’s entertainment.
• Young fans matter because they become lifelong fans and consumers.
• Digital platforms don’t cannibalize TV rights. They amplify them.
• Competitive racing is more profitable than predictable dominance.
• The US market is worth the investment.

Liberty didn’t just change F1’s business model. They changed the culture.

Before Liberty: F1 had no marketing department, no social media team, no content strategy
After Liberty: F1 hired executives from ESPN, Fox Sports, and Disney. They built a media company around the sport.

Before Liberty: Teams received unequal revenue shares, with Ferrari getting massive bonuses just for showing up
After Liberty: Revenue distribution became more balanced (though Ferrari still gets a historical bonus).

Before Liberty: Bernie Ecclestone negotiated deals face-to-face in private
After Liberty: F1 became a transparent, publicly traded company with clear financial reporting.

The Risks: Can Liberty Keep It Going?

What Could Go Wrong

Liberty Media’s F1 turnaround is one of the most successful sports transformations in history. But risks remain.

Challenge 1: Max Verstappen’s Dominance

Max Verstappen and Red Bull won 53 of 90 races between 2021 and 2024. If the racing becomes predictable again, casual fans might lose interest. The cost cap helped in 2021-2022, but Red Bull’s dominance in 2023-2024 has some fans worried.

Challenge 2: US Market Saturation

Three US races in 2024 is great for revenue. But will American fans keep showing up if the novelty wears off? NASCAR and IndyCar have struggled to maintain viewership despite decades of history.

Challenge 3: Engine Manufacturer Stability

F1 currently has four engine suppliers: Mercedes, Ferrari, Honda (Red Bull), and Renault (Alpine). If one leaves, several teams could be in trouble. Liberty is trying to attract more manufacturers, including GM/Cadillac, but that’s still uncertain.

Challenge 4: Team Profitability

While F1 as a whole is profitable, some teams still struggle. Haas, Williams, and Alpine are financially healthy now, but they depend heavily on prize money and sponsorships. If revenues dip, smaller teams could collapse.

Challenge 5: Balancing Tradition and Growth

F1 fans love historic races like Monza, Spa, and Monaco. But these races don’t pay as much as newer venues like Saudi Arabia or Las Vegas. Liberty has to balance heritage with revenue. Losing iconic races could alienate hardcore fans.

The Bottom Line: Liberty’s Formula for Success

Liberty Media took a dying sport and turned it into a $3.4 billion revenue machine. They did it by rejecting Bernie Ecclestone’s old-school approach and embracing modern media, digital platforms, and fan engagement.

• Netflix documentary to attract new fans (Drive to Survive)
• Digital transformation and social media explosion (97 million followers)
• Cost cap to create competitive balance ($135 million per team)
• US market expansion (three US races, including Las Vegas)
• Increased race calendar (24 races in 2024)
• Sponsorship growth (46% increase between 2022-2024)
• Premium experiences and direct-to-consumer streaming (F1 TV)

F1’s revenue doubled. Team valuations increased 276%. The sport went from 40% fewer viewers to 1.6 billion cumulative viewers in 2024.

Liberty Media proved that sports rights aren’t just about selling TV deals. They’re about building entertainment brands, engaging fans year-round, and creating content that transcends the sport itself.

F1 isn’t just a racing series anymore. It’s a global entertainment franchise. And Liberty Media is making billions from it.

That’s how you turn a decades-old sport into a modern media empire.