Is Hosting F1 Always Profitable?

F1 or Formula One is one of the highest tiers of single seat racing. F1 is managed under the FIA (Federation Internationale de L'Automobile) and is currently owned by Liberty Media. This prestigious race is known to have the fastest car ever made with complex aerodynamic engineering. These cars are designed to reduce the drag that is produced when they are crushing at such high speed and have increased downforce. In short, these cars are specifically made for speed, crushing through high-speed corners and making a lap time. Other than that, F1 has had a role in the economic sector of its hosts. Some say that hosting the F1 Grand Prix is profitable and some say, it's not. So which really is it? Let's break it down. 

Countries that want to hold F1 Grand Prix have to fulfill some of FIA's standard of circuit. As the governing bodies of F1, FIA decide whether or not countries can host the Grand Prix. They even have their own procedure and aspects that must be considered such as, historic aspect, infrastructure, the facility, economic condition, geographic conditions and political stability. But the undeniable truth is that money talks. In order to hold the Grand Prix event, the host countries must pay a sum of money to the Liberty Media as the commercial holder of F1 itself. There are only 24 slots each year in the calendar. The problem is that there are more than 24 countries that are willing to host the Grand Prix. 

Some countries like Saudi, Azerbaijan, and Bahrain even reported that they are paying up to US$55 Million per year so that they're included in the F1 calendar each year (Statista.com, 2025). This is seen as long-term strategic investment as the host countries require a lot of funds to hold the Grand Prix, including building infrastructures such as hotel, circuit maintenance, maintaining the area around the circuit, and improving the circuit itself. By staying longer in the F1 calendar, host countries are more likely to expose themselves more and cover the cost of the infrastructure that has been built specifically for the Grand Prix. 

Countries that are chosen to be host of the Grand Prix exposed themselves to the worldwide audiences. With tourism potential and F1 fans across the world who want to watch and experience the Grand Prix. These races are held in three different days, Friday for the free practices, Saturday for qualification, and Sunday for the race itself. Fans and tourists might stay longer so that they have a chance to explore the city around the circuit to enjoy the tourism. This indirectly promotes the local culture, foods, economy and improves the city's revenue as a whole. For example, Las Vegas' revenue almost doubled after the city hosted its first F1 Grand Prix in 2023. With a budget of $500 million USD, the city got total revenue of $934 million USD and a total impact of $1.5 billion USD.

Even though investment has had positive effects for the domestic economic sector, not all of the hosts that hosted F1 got the benefit, some of them even ended up losing money from it. For example, there is Circuit of the Americas in Austin, Texas. The circuit faced financial challenges as the high maintenance cost, profit split with the F1 management and for the nail in the coffin, COVID-19 hits and this circuit is estimated to have lost US $20 Million since 2016. There are reports of revenue decline during the 2025's first quarter, the Front office sports reported that there is a 27% decline of revenue costing up to $403 million and the profit of $136 million turned into $28 million losses. Despite these declines, there are deals going. One of them being long-term extensions for the Miami GP to 2041 and  Mexico City GP to 2028. Race hosts continue to see long-term benefits in staying in the F1 calendar longer.  

F1 is not always about racing, its influence goes beyond the racing world. Countries that are chosen to be host of the Grand Prix invested so much money for the potential that it gives. This is seen as a strategy for the host countries to promote their culture, and improve its economic sector with the potential tourism. Despite some financial loss, countries are still willing to pay so much money and extend their contracts. It shows that there is a larger potential that it gives in the long term, more than you might think. 

References

Formula 1, (2025). What is F1? F1.com Mehta, S. 2024. Is Hosting an F1 Race Financially Feasible?. University of Michigan. https://sites.lsa.umich.edu/mje/2024/04/29/is-hosting-an-f1-race-financially-feasible/https://www.formula1.com/en/page/what-is-f1

Bodsworth, A. 2023. How did F1 Generate $2.5bn of Revenue in 2022?. Linkedin. https://www.linkedin.com/pulse/how-did-f1-generate-25bn-revenue-2022-adam-bodsworth/

Hunt, B. 2025. Las Vegas GP Organizers Say F1 Race Generated $934m in Revenue for the Area. Autosport. https://www.autosport.com/f1/news/las-vegas-gp-organisers-say-f1-race-generated-934m-in-revenue-for-the-area/10700449/

Oxford Political Review. 2023. The Race for Influence in Formula 1. Issuu. https://issuu.com/oxfordpoliticalreview/docs/opr_issue_9_pr_ml_issuu/s/23567525