Interest in Formula 1 — the world’s most popular racing series — has skyrocketed in recent years. Formula One Group (NASDAQ:FWONA) — which oversees development and promotion — is raking in the sponsors.

Bringing Formula One back to life

F1 viewership had been falling fast since 2008. Then Liberty One Media acquired Formula One in 2017, invested heavily in digital growth and reinvigorated interest in the sport.

• Netflix’s Formula 1 docuseries were instrumental in raising interest in the U.S. as U.S. viewership jumped 56% in 2021.
• Under Liberty’s ownership, U.S. sponsors doubled — bringing in big tech sponsors like Google and Salesforce.

F1 is different from other sports, and it’s one of the few truly global sports running year-round.

Interest in hosting F1 races has also increased and now there’s more interest than F1 can handle…

More viewers, more sponsors, more revenue…

There will be a record 23 races this year, but the number of races is limited to 24 as set by its governing body. In the states, F1 races were hosted in Miami and Texas, with Las Vegas coming next year.

Over the past few months, streaming platforms, including Amazon, Netflix and NBCUniversal, competed for F1’s U.S. streaming rights.

• In the end, F1 stuck with Disney’s ESPN — renewing a deal to show races in the U.S. for $75-90M a year.
• This deal was a 1,500% increase from its previous one, where Disney only paid $5M a year.

Last month, Apple announced plans to create an F1 movie starring Brad Pitt, and F1’s U.K. contract is coming up in 2024. The sport is gaining speed, but how long can it keep our attention?

Investors: Formula One has an issue…

The company has a highly complex corporate structure:

• FWONK
  is considered a tracking stock — that tracks the performance of a single division within a larger company. It’s a corporate structure that’s rarely used nowadays.
• Liberty Media Group is the parent company. Under it is three divisions with their own tracking stocks: Formula One, SiriusXM (NASDAQ:SIRI) and Braves Group (NASDAQ:BATRA).

If Liberty’s other subsidiaries run into trouble, F1 could also be affected.

DespiteFWONA

being down only 5% in 2022 — its complex structure gives the investment lots of uncertainty, and valuations aren’t a screaming buy. For now, enjoying F1 from a safe distance may be better.