In 2025, Formula One is poised for significant expansion, with revenues estimated to grow by over 10% and profits increasing at an even faster rate. A major catalyst for this growth is the newly secured media rights agreement with Apple for U.S. broadcasts, commencing in the 2026/2027 season. This partnership underscores Liberty Media's confidence in leveraging digital platforms for broader reach and future development. Despite the promising outlook, Liberty's shares are currently trading at nearly 30 times its projected cash earnings per share, prompting a closer examination of its valuation in light of its strategic ventures and growth potential.
Formula One's trajectory is built on several key pillars. The introduction of new engine and chassis regulations in 2026 is expected to inject fresh dynamism into the sport, alongside the planned entry of two new teams, Audi and Cadillac. These developments are anticipated to enhance the competitive landscape and audience engagement, thereby boosting revenue streams. The Apple media rights deal, valued at $150 million annually for five years, represents a substantial 50% increase over the previous contract, signaling a strategic pivot towards digital distribution and a significant bet on the sport's long-term growth in the U.S. market. Liberty Media's collaboration with Apple on a recently released Formula One film starring Brad Pitt further solidifies their synergistic relationship and shared vision for content creation.
Beyond Formula One, Liberty Media is also exploring opportunities in MotoGP, recognizing its inherent growth potential. While MotoGP is not expected to achieve the same scale as Formula One, it is viewed as a valuable asset that can generate attractive returns. The strategic acquisitions and partnerships, coupled with a forward-looking approach to content and distribution, position Liberty Media for sustained growth in the global motorsports and entertainment sectors. Investors are weighing the current valuation against these aggressive growth forecasts and strategic moves.
Overall, Formula One's robust revenue and profit expansion, driven by innovative media deals and strategic partnerships, underscores its strong market position. The engagement with Apple for U.S. broadcast rights and co-production efforts highlights a proactive strategy to broaden its global appeal. While the current share valuation reflects high growth expectations, the underlying operational enhancements and diversification into other motorsport ventures like MotoGP suggest a well-rounded approach to long-term value creation.