(BFM Stock Exchange) – The Liberty Formula One action, which reflects the operational performance of the business rights operator of the Queen of Motor Sports discipline, has affected the highest historicals this year. But in the opinion of several analysts, its potential is now limited.

The F1 season, a queen discipline of motorsport, is currently enjoying a summer break between the Hungarian Grand Prix, disputed on August 3, and that of the Netherlands, scheduled for the weekend of August 31.

On the stock market, the F1 also seems to take a break. The action “Liberty Formula One” is struggling somewhat to move forward, since its highest historical touched last June (106.26 dollars on June 30 against 100 dollars at the European closure on Friday).

Recall that the discipline strictly speaking is not listed on the stock market. The action “Liberty Formula One” refers to the operator of his commercial rights, that is to say Liberty Media.

The American group had acquired the rights of the Formula 1 championship in 2017 until the end of December 2110. The Liberty Media action was then renamed “Liberty Media Formula One Group”.

Since then, the American group has split many of its activities unrelated to F1 (such as its Atlanta Braves baseball franchise or musical streaming with Sirius XM). Recently, Liberty Media has been aside “Liberty Live Group” which notably brings together her 30% participation in Live Entertainement, a company specializing in the organization and promotion of shows and concert.

So much so that the action “Liberty Formula One” essentially reflects the operational performance of the exploitation of F1 rights, even if the title includes other assets of Liberty Media, such as the rights of the World Motorcycle Championship, MotoGP, as well as other minor possessions (such as the land where the Grand Prix de F1 in Las Vegas takes place or a race team engaged in Indycar).

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A growth of 11% per year since 2019

Since the acquisitions of F1 rights by Liberty Media, success has been undeniable, both operational and scholarship holders. In 2023 as in 2024, F1 obtained the crown of “the most expensive sports empire” awarded by Forbes.

Bank of America, who started monitoring the action on August 4, recalls that the action flew up 200% in five years. “This is partly explained by their excellent results in terms of execution, which have contributed to the global popularity of this sport and to solid financial performance (thanks to promotion, sponsorship and television rights),” said the American bank.

Bank of America notes that since 2019, the company’s revenues have increased on average by 11% per year, with, in detail, growth of 11% per year for income -related income, 8% per year for television rights, and 16% per year for sponsorship revenues.

“In addition, they have considerably increased the popularity of this sport, with a 125% increase in the hearing in the United States (including a significant increase in women and young people compared to 2018). This underlying growth and the introduction of cost ceilings (for stables, editor’s note) brought financial stability to this sport, which, in all, From recent years, “said Bank of America.

Social networks and Netflix

We had detailed, in a previous article, the efforts that Liberty Media undertook to energize an aging discipline and thus awaken a beautiful sleepy, in particular by finally putting F1 on the page of social networks, which refused to do his previous big silver, Bernie Ecclestone.

“At the time of Bernie Ecclestone, F1 was a futuristic sport with medieval management. Especially Ecclestone hated social media,” said News Bulletin 247e, Paolo Aversa, professor at Bayes Business School in London, in 2023.

The presence on social networks made it possible to attract a younger audience and to maintain the audience with free content (by broadcasting highlights or extracts) without cannibalizing the economic model “Pay Per View” (paid television) in force in the main countries which broadcast F1.

The success of the Netflix series “Drive to Survive” has also contributed a lot to the development of the discipline. Launched in 2019, this soap opera shows behind the scenes of the discipline by focusing on human relationships and rivalries. The pandemic, which has led many consumers to stay at home and watch streaming offers, has played an accelerator role, a new generation, ranging from Y to the Z, discovering a sport of which it has so far ignored the attraction, the technicality of the discipline that could put it off.

“Netflix has really helped consumers understand the passion behind the competition, and not only at the top of the grid, but in the ‘Midfield’ [les écuries du milieu du classement, NDLR]”, Trancled Paolo Aversa.

High but already integrated growth?

The fact remains that the Liberty Formula One patina action for a few months. The latest analysts’ opinions consider that the title lacks juice to move up a gear.

In June, Bernstein had initiated his advice to “market performance”, which corresponds to “neutral” in the terminology of the financial intermediary. Bernstein reiterated this opinion in early August. According to Investing.com, the design office estimates that Liberty Formula One remains “an attractive platform” to “monetize the rights of motorsport”, with financial results and a solid balance sheet.

Only here, the enhancement of the title already reflects its solid financial perspectives, Bernstein believing that the level of action already implies “high growth of income to a figure” per year (which can be translated by annual growth ranging from 6% to 9%), an expansion of margins and a reduction in debt.

Bank of America delivers a fairly similar diagnosis. The American bank is quite enthusiastic about the operational qualities of Liberty Formula One.

The establishment models an average growth of 8% per year of the company’s turnover (excluding activities related to MotoGP rights), for income from $ 3.41 billion in 2024 to 4.35 billion in 2027. The operating profit adjusted before depreciation and depreciation would pass from $ 791 million to $ 2024 to $ 1.14 billion in 2027, Marge hoisting 26.3% to this horizon against 23.2% in 2024.

Beyond the financial performance properly speaking, “F1 offers an advantageous economic model characterized by highly predictable income flows, low capital intensity and attractive conversion of available cash flow. Associated with the perception of F1 as a ‘prestigious active’, these dynamics justify the high valuation of the company”, explains Bank of America.

“A Stand Stop” necessary

Finally, F1 has the advantage of being one if not the only sport to offer sponsors and its participants a premium global exhibition on five continents, which is rare and therefore expensive.

“F1 is a global sport, present in many countries, which offers rare visibility on many aspects of the monetization ecosystem of this sport,” explains Bank of America.

But the trees do not climb to the sky. Bank of America believes that action needs to “make a stand at the stand”.

“We consider F1 as a large brand and a profitable company with interesting growth characteristics. However, we believe that this is reflected in current valuation”, judge Bank of America. In other words, the market has already taken the full measure of the qualities of “Liberty Formula One”.

“If the fundamental factors are very visible and predictable (in many ways, ‘similar to those of obligations’), we have trouble seeing significant catalysts for expanding multiple short -term scholarship holders,” adds the bank.

Bank of America also notes that in terms of commercial opportunities, the group has already harvested “the fruit of the tree easiest to catch”.

“For example, F1 has already expanded its shopping calendar in recent years and increased the number of ‘Flyaway’ races, that is to say the competitions that take place outside the traditional European sites of this sport, two factors that have favored income related to racing promotion”, explains the bank. “Company could reach the higher limits of these two factors that have fueled its recent growth,” she adds.

Bank of America also lists a certain number of risks, even if the company enjoys enviable visibility on its activity.

Efforts to fuel the growth of long -term discipline can, for example, have negative impacts in the short term. This is in particular what happened with the Grand Prix of Las Vegas, which, in 2024, missed its income and profitability targets, according to the establishment.

The bank also evokes the possibility that sports rights have reached their full potential. “We have been worried more and more lately about the approach of a ‘peak of sporting rights’, partly because of long-term underlying challenges in traditional media ecosystems, which harm the financial capacity of several potential buyers to continue to support ever higher rights,” she said.

“Even if the proliferation of several global streaming platforms with significant financial means could fill this void, a decrease in the number of media rights buyers in the future could have a negative impact on the value of these rights,” adds Bank of America.

On this last point, the establishment recalls that the title is currently exchanging with generous multiples which makes it all the more vulnerable to disappointments. However, the renewal of television rights in the United States is underway. Several press information reported that Apple would hold the rope.

“If this renewal were to disappoint in relation to expectations, this could have a significant impact on the multiple of society, because this could increase concerns about its future growth or its global perception as a first -rate intellectual ratio,” warns Bank of America.