Liberty Media Corp., owner of the Formula 1 racing business, is seeking additional funding from the Principality of Monaco as part of advanced negotiations for a new contract to extend the historic auto racing series beyond 2025.
Monaco pays about $20 million a year to host the event, the lowest fee on the 24-race calendar, and Liberty Media representatives are seeking to increase the fee, according to people familiar with the matter. The parties agreed to the current three-year agreement in September 2022.
Like all major tourist attractions, the Monaco Grand Prix brings a huge economic boost to the region, with hotel rooms packed with consumers large and small. The other two tournament hosts, Saudi Arabia and Bahrain, are estimated to spend more than $50 million a year. These fees provide Formula 1 with the funds to pay prize money at the end of each season.
A Formula 1 spokesman declined to comment on current negotiations but said the company would not consider exiting Monaco. The race’s organizer, the Automobile Club de Monaco, did not respond to a request for comment.
Under CEO Greg Maffei, Liberty Media’s annual Formula 1 revenue has grown more than 50% since 2019, reaching $3.22 billion last year. The company has been working to promote Formula One racing beyond Europe, where the sport originated. The United States currently hosts three tournaments in Miami, Austin and Las Vegas, and there have been rumors that the tournament will be held in another US city.
In 2022, New York City Mayor Eric Adams floated Randall’s Island as a potential venue, but Formula 1 CEO Stefano Domeni Stefano Domenicali disagreed with the feasibility of the site because the stadium’s small island would be difficult to access for the more than 300,000 fans expected.
Thailand’s prime minister recently met with F1 officials to discuss the race in Bangkok.
The glamorous Monaco Grand Prix takes place on the sun-drenched streets of Monte Carlo and is considered the ultimate event in motorsport. Monaco organizers have been reluctant to change their business model because they believe the history and prestige of the nearly 100-year-old circuit trump financial considerations, a person familiar with the matter said. Many drivers live in Monaco.
But Formula 1 fans and famous drivers including Max Verstappen, Fernando Alonso and Lewis Hamilton have criticized the two-mile track as being too dreary because of the size of modern racing cars that restricts them Make daring overtakes and three-a-side races that more modern tracks don’t.
“Thank God it’s over, it was the most boring race I’ve ever been in,” seven-time world champion Hamilton said after finishing third in 2022.
The principality has been forced to change in the past. Two years ago it gave up its rights to produce television coverage of the game in exchange for a new contract.
“Monaco is the epitome of F1,” said Vincenzo Landino, an F1 analyst and consultant who publishes Qualifying, a newsletter about the sport. “In my opinion, if you get away from that, now you have a brand crisis.”
