Formula 1

Bullish:

• $FWONK - Liberty Media has successfully transformed Formula One into a highly valuable business, with market cap growing from $4.4B to $22B since 2017 acquisition, driven by US expansion and media rights growth.

  • “Liberty has done quite well turning 4,400,000,000.0 of equity in 2017 into five x that in nine years. That's about a 22% compound annual growth rate.”

    Ben·3:51:20

  • “The bull case for f one here is in a lot of those markets, we like we were talking about earlier, they've got these vertically integrated sort of the channel is the broadcaster is the network thing, and they don't have a competitive bidder. And so with Apple, with Netflix, with more likely Amazon, I think, than Netflix. But with streamers and with YouTube buying media rights, now you have these tech companies as real viable bidders”

    Ben·3:30:52
• $AAPL - Apple's F1 movie grossed $630M (highest sports movie ever) and they secured US F1 media rights for $150M/year, positioning them well in sports streaming.

  • “Which grossed $630,000,000 worldwide at the box office. The highest amount, not only for a racing film, for any sports movie ever, and the highest grossing box office movie of Brad Pitt's entire career.”

    David·3:28:43

  • “Apple comes in over the top for The US media rights negotiations with a five year deal at a $150,000,000 a year.”

    David·3:30:08

  • “And for Apple, this is probably just the tip of the iceberg of what they can do with f one.”

    Ben·3:30:43
• $NFLX - Netflix's Drive to Survive has been the most impactful sports media property ever, doubling F1's US viewership and reaching 40-50M unique viewers globally.

  • “what we're getting at is they end up with, I think, the most impactful piece of sports media in history. Ever across any sport.”

    David·3:04:43

  • “So if you look at f one viewership in The US, in 2018, before drive to survive launched, about half a million Americans watched races. In 2021, that has doubled in three years to over a million Americans watching f one Grand Prix.”

    David·3:15:16

  • “Oracle's CMO said, I believe on an earnings call, that drive to survive was the reason that they decided to get into f one and do the big Red Bull sponsorship.”

    David·3:23:42
• $REDBULL - Red Bull has transformed from energy drink company to legitimate constructor with massive marketing ROI, now building their own powertrains and supercars.

  • “They have developed so much competency in actually being a constructor that They're building a car. Right? Like a like a road car.”

    Ben·2:17:35

  • “They generate zero profit despite being one of the best teams and the highest revenue teams or near zero profit, very thin, to create the biggest marketing spectacle that they can to sell energy drinks. It's a just a super different business model than anyone else”

    Ben·2:13:26

  • “Red Bull has Red Bull powertrains, which is a lot of former Honda people that they've sort of hired, and now they're working with Ford. But, like, they they do a lot of the things that a car company does.”

    Ben·2:18:08
• $MERCEDES - Mercedes F1 team generates $200M in operating income on $800M revenue with 25% margins, plus $1B in advertising equivalent value, making it an exceptional business.

  • “Mercedes does 800,000,000 in revenue now.”

    Ben·2:52:56

  • “Mercedes does an estimated 200,000,000 in operating income from Formula one now.”

    Ben·2:53:40

  • “Total Wolf estimated in 2021 that Mercedes that he thinks Mercedes gets a billion dollars of advertising equivalent value for being involved in the sport.”

    Ben·2:53:57

  • “So on $600,000,000 of total spend last year, Mercedes generated a double bottom line of over $1,000,000,000 in marketing equivalent value plus $200,000,000 in actual profit.”

    Ben·2:54:07