Complex Made Simple

How many billions is the Middle East contributing to Formula 1 Grand Prix?

Bahrain has hosted the Formula 1 Grand Prix races for 14 consecutive years, being the sole owner of the host rights in the middle east, until Abu Dhabi stepped in and asked to be able to host the event in their region.

Estimates show that Abu Dhabi spent around $500 million, to set up the beautiful Marina we see today; including LED lighting and other attractions for the sole purpose of this event.

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What are the numbers

In order to host an F1 event, an organizer must pay a flat fee of $30.4 million, and over the life of the contract, they include a flat fee escalator which is a fixed percentage of up to 5% per year.

This has brought Bahrain’s estimated fee at just under $53 million, according to Forbes.

Abu Dhabi’s fee is estimated at $84 million, as per CNN

Amounting to $1.2 billion in fees from both countries over the course of 14 years

F1’s revenue last year was $1.8 million and 1/3rd of the revenue was from organizer fees, Forbes reported.

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Income streams

For both Bahrain and Abu Dhabi profit solely comes from ticket sales; $5,700 and $4,900 respectively for the Three-Day Paddock Club tickets, with estimated average attendees being 3,600.

While any other revenue is taken by F1 from advertisements to the reception and booths where guests are entertained.

That revenue, in fact, is what generated such a high amount of money, $2.6 billion over the course of 14 years for the F1 Group which is owned by many shareholders the biggest being Liberty Media, based in the US.

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Interest from Middle East Businesses

Gulf Air and Etihad Airways get naming rights in both Bahrain and Abu Dhabi Grand Prix, with sponsorship deals priced at around $8 million.

Emirates became an official partner in 2013 paying $25 million annually.