Formula One Group's Q3 2025: Contradictions in Media Rights, U.S. Strategy, Ticket Pricing, and Sponsorship Plans

Business Commentary:

* Formula 1 (F1) Revenue Growth and Commercial Momentum: - Formula One Group reported revenue up 9% year-on-year for Q3 2025, despite having one fewer race. - The growth was driven by strong performance across sponsorship, media rights, and licensing, with notable new partnerships like a distribution agreement with Apple.

• MotoGP Acquisition and Strategic Investments:
• Liberty Media noted continued investment in MotoGP to enhance the Grand Prix experience, expand global footprint, and grow sponsorship.

• The investment is focused on increasing MotoGP's commercial capabilities, with a focus on identifying partnership opportunities between F1 and MotoGP.

• Apple Partnership and U.S. Media Rights:

• Formula One signed a five-year media rights distribution agreement with Apple as the exclusive U.S. distributor, commencing in 2026.

• This partnership aligns with the company's strategic focus on enhancing the U.S. market reach through innovative digital platforms.

• Vegas Grand Prix Ticket Sales and Cost Management:

• The Las Vegas Grand Prix is on track to meet budgeted ticket sales targets, with a focus on controlling costs and enhancing the event's community perception.
• Successful collaboration with local partners has led to better cost management and increased community engagement, ensuring a sustainable long-term event.

Contradiction Point 1

Media Rights Strategy and U.S. Market Focus

It involves a shift in strategy regarding media rights and the focus on the U.S. market, which are crucial for revenue growth and market penetration.

How are you assessing this deal in terms of engagement and risks of moving away from linear or ESPN? Did you consider Apple's global bidding presence in more regions? - David Karnovsky(JPMorgan Chase & Co, Research Division)

2025Q3: The Apple deal is seen as beneficial due to its brand relevance and potential to increase social relevancy of F1. The decision was a balance of risk versus opportunity, favoring the partnership. Engagement will be enhanced through content on the Apple ecosystem. Apple's global presence could aid in negotiations in other regions. - Stefano Domenicali(CEO)

U.S. media rights negotiation updates? Prioritizing reach vs. payment? Role of F1 TV? - David Karnovsky(JPMorgan)

2025Q2: Negotiations progressing with midterm agreements sought. Balancing reach and awareness, focusing on quality partners for future growth. F1 TV is integral as it grows, affecting engagement and monetization. - Stefano Domenicali(CEO)

Contradiction Point 2

Las Vegas Grand Prix Ticket Pricing Strategy

It revolves around the company's approach to ticket pricing for the Las Vegas Grand Prix, which directly impacts revenue and demand.

How are you budgeting for the Las Vegas Grand Prix, and will there be an increase in U.S. media rights revenue next year due to the Apple deal and F1 TV subscription loss? - Bryan Kraft(Deutsche Bank AG, Research Division)

2025Q3: Vegas ticket sales are on target, with a focus on cost control. Pricing strategy differs this year with no late-season discounts. Apple will take over F1 TV subscription, maintaining a solid community, which is expected to positively impact revenue. - Stefano Domenicali(CEO)

How much revenue will the F1 movie contribute, and how is MotoGP management ownership accounted for? - Bryan Kraft(Deutsche Bank)

2025Q2: On-sale process adjusting to a lower price point, which has improved ticket sales. This approach is paying off with increased demand for future races. - Stefano Domenicali(CEO)

Contradiction Point 3

Sponsorship and Licensing Strategy

It involves the company's approach to sponsorship and licensing agreements, which are key revenue drivers for the company.

Are the new sponsorship opportunities primarily in 2026? Could you discuss the licensing strategy and opportunities? - Kutgun Maral(Evercore ISI Institutional Equities, Research Division)

2025Q3: Sponsorships are primarily long-term agreements, impacting future years. The strategy focuses on retaining and expanding partners. Licensing is a long-term opportunity; new partnerships like Disney and Hello Kitty are part of this growth strategy. The aim is to leverage the platform's value and increase fan engagement. - Stefano Domenicali(CEO)

What are the expectations for MotoGP's financial performance and sponsorship pipeline in 2026? - Benjamin Swinburne(Morgan Stanley)

2025Q2: MotoGP financials impacted by race mix and cancellations. Sponsorship focus on long-term deals, with significant opportunities and pipeline for '26. - Brian Wendling(CFO)

Contradiction Point 4

Sponsorship Revenue Growth Expectations

It involves differing expectations and explanations regarding sponsorship revenue growth, which directly impacts the company's financial performance.

Will the new sponsorship opportunities primarily occur in 2026? - Kutgun Maral(Evercore ISI)

2025Q3: We have a strong pipeline with quality over quantity focus. There's genuine activation with partners, and we continue to grow sponsorship revenue. - Stefano Domenicali(CEO)

Does sponsorship growth indicate a 50% underlying increase, and what media rights opportunities are available? - Peter Supino(Wolfe Research)

2025Q1: Sponsorship growth is complex due to calendar changes and new contracts. On media rights, the growing engagement on digital platforms is crucial. - Stefano Domenicali(CEO)

Contradiction Point 5

Media Rights and Streaming Strategy

It involves changes in the approach to media rights and streaming, which are crucial for fan engagement and revenue generation.

How are you assessing the U.S. rights agreement's engagement potential and risks related to transitioning away from linear or ESPN? Did you consider Apple's global bidding presence across multiple regions? - David Karnovsky(JPMorgan Chase & Co, Research Division)

2025Q3: The Apple deal is seen as beneficial due to its brand relevance and potential to increase social relevancy of F1. The decision was a balance of risk versus opportunity, favoring the partnership. - Stefano Domenicali(CEO)

What are the financial and strategic implications of your local media rights agreements? Have there been any changes to the FanDuel agreement after the bankruptcy? How do you assess your debt levels and cash management strategy? - Benjamin Swinburne(Morgan Stanley)

2024Q4: The new media deal adds streaming capabilities to local rights, enhancing fan accessibility. - Derek Schiller(Executive)