RACING: F1 owner Liberty Media can ride out Mideast conflict

LONDON — The ongoing Middle East conflict has forced the cancellation of the Bahrain and Saudi Arabia Grands Prix, hitting Formula One’s race calendar and the share price of its owner, Liberty Media (FWONA.O). Despite the short-term disruption, market analysts believe the sport and the U.S.-based media company are likely to weather the crisis.

Since U.S.-Israeli strikes against Iran began on February 28, Liberty Media’s shares have dropped 11.7%, roughly double the global market decline, wiping out $2.46 billion in market capitalization.

However, analysts say the impact on F1’s long-term prospects is limited. Media revenue remains largely unaffected, the war is expected to be short-term, and Middle Eastern nations may offer extra incentives to keep races in the region.

“I think it’s a big overreaction… the stock is discounting a loss of these events seemingly for many years,” said Lance Vitanza, managing director and senior analyst at TD Cowen, a U.S.-based investment bank.

Liberty Media, led by new Chairman Robert Bennett, purchased F1 in 2016 for $4.4 billion. The company also owns MotoGP, which rescheduled its Qatar Grand Prix from April to November because of the conflict.

F1’s reduced 22-race calendar will likely prevent revenue growth from last year, when income jumped 14% to $3.9 billion. The cancelled Saudi Arabia and Bahrain races had been projected to generate $118.5 million in race promotion fees and $93.7 million in allocated sponsorships, according to Bernstein Research.

Still, F1 is expected to retain most of its media rights revenue. “The way the contracts work, they likely won’t receive a promotion fee for these two events. They can mitigate some losses because media rights are separate, but sponsorship revenue will be harder to fully recover,” said Ian Moore, equity research analyst at Bernstein.

As long as F1 holds over 16 races, media rights payments will continue under multi-year broadcast agreements, analysts note.

Optimism for Stability and Future Growth

Despite the conflict entering its fourth week, market watchers remain optimistic. Moore said the Iran crisis could be a “clearing event” that reduces long-term geopolitical volatility in the region.

Middle Eastern countries hosting F1 events are also expected to restore tourism and improve their image once security stabilizes, potentially offering higher promotion fees and incentives to attract future races.

TD Cowen’s Vitanza added that lower revenues in 2026 could be a stepping stone for “dramatic growth” in 2027. Peter Supino, senior analyst at Wolfe Research, said, “Investors agree that Formula One is a strong business with a bright future. Its cash flows and revenues are expected to grow, regardless of a race or two being canceled this year.”

Since February 27, Liberty Media’s share price has reflected these market concerns but analysts remain confident in the company’s long-term outlook.

-Reporting by Streisand Neto; Editing by Andrew Cawthorne/Reuters