Formula One Predicted to Recover After Share Price Slump from Cancelled Middle East Races
Formula One has been forced to cancel races in Bahrain and Saudi Arabia earlier this month due to the ongoing Middle East conflict, impacting its race calendar and causing a significant dip in the share price of its owner, Liberty Media. However, market analysts remain confident that both the sport and its parent company are well-positioned to navigate the crisis, with long-term prospects appearing robust and resilient.
Immediate Financial Impact and Market Reaction
Since US-Israeli strikes against Iran commenced on 28 February, Liberty Media's shares have fallen by 11.7 per cent – approximately double the overall global market decline – resulting in a loss of $2.46 billion in market capitalisation. The Bahrain and Saudi Arabia Grands Prix have also been cancelled from the schedule, reducing the calendar to 22 races.
Despite these immediate setbacks, analysts suggest there is no need for panic. Formula One's media revenue appears largely unaffected, hopes remain for a short-term resolution to the conflict, and Middle Eastern nations are expected to offer additional incentives to retain races in the region in the future.
Analyst Perspectives on Overreaction and Long-Term Outlook
Lance Vitanza, a managing director and senior analyst for US-based investment bank TD Cowen, who tracks Liberty, commented: "I think it's a big overreaction... the stock is discounting a loss of these events seemingly for many years."
The media, sports, and entertainment conglomerate, now led by chairman Robert Bennett, acquired F1 in 2016 for $4.4 billion. Its portfolio also includes MotoGP, which has already rescheduled its Qatar Grand Prix from April to November due to the regional instability.
F1's now reduced, 22-race calendar will mean no revenue hike from last year where income jumped 14% to $3.9 billion, according to Liberty's fourth quarter and year-end 2025 results. The cancelled Saudi Arabia and Bahrain Grands Prix had been estimated to contribute $118.5 million in race promotion fees and $93.7 million in allocated sponsorships, according to the research and brokerage unit Bernstein.
Media Rights and Future Growth Prospects
Crucially, despite these losses, the single-seater franchise is still expected to secure its media rights revenue. Ian Moore, an equity research analyst from Bernstein, told Reuters: "The way the contracts work, they (F1) likely won't receive a (race) promotion fee for these two events. They can mitigate a bit of that because the media rights portion of the race economics is separate, but it's going to be hard to fully recoup sponsorship as well." He added that as long as F1 delivers over 16 races, media rights payments will continue due to existing multi-year agreements with broadcasters.
Liberty Media declined to comment on the situation. However, market sentiment suggests optimism that the conflict, now in its fourth week, will prove to be a temporary anomaly for F1 and its owner. Moore noted: "There is a solid argument that this entire Iran conflict is potentially a clearing event that removes geopolitical volatility from the region on a more permanent basis, meaning you're potentially not going to have disruptions like this recur longer term."
Rebuilding and Incentives in the Middle East
Once security is re-established, Middle Eastern countries with F1 circuits are anticipated to focus on rebuilding tourism and restoring their image, potentially offering higher promotion fees and other incentives for motorsport events. Vitanza suggested that lower revenues in 2026 compared to last year could serve as a springboard for "dramatic growth" in 2027.
Peter Supino, a managing director and senior analyst at New York-based Wolfe Research, concluded: "I think years from now, Formula One will almost certainly be unaffected by the fact that maybe a race or two was cancelled this year. Investors in general agree that Formula One is a really good business with a bright future, and that Formula One's cash flows and revenues are going to grow."
