$30.00
$62.00
bear $30.00
base $51.00
bull $62.00
margin of safety $33.00
market price* $83.18
WHAT THE BUSINESS IS This company (Series A shares trade as FWONA) is now a pure motorsport rights owner. Formula 1 holds the exclusive commercial rights to the Formula One World Championship under agreements with the FIA that run to the end of 2110. In July 2025 it also bought about 84% of MotoGP, which holds the exclusive commercial rights to the MotoGP motorcycle championship through an agreement with the FIM that runs to the end of 2060. SiriusXM, the Braves and the Live Nation stake have all been separated over 2023 to 2025, so only the recent financials describe the current business. In 2025 revenue was $4.48 billion, of which Formula 1 was $3.87 billion. Formula 1 is paid by race promoters (26.7% of its 2025 revenue), broadcasters (31.3%) and sponsors (21.7%), plus hospitality, freight and other income. The filing states that a significant majority of these contracts require payment in advance and carry annual fee increases; race promotion contracts typically escalate by inflation or up to 5% a year. About $1.4 billion a year goes out to the teams as prize money under the Concorde Agreement, which now runs through the 2030 season. OWNER EARNINGS We measure what the business really leaves for shareholders: operating cash flow, less working-capital swings, less stock compensation, less the capital spending needed just to stand still. Per share this came to about $0.10 in 2023 (depressed by roughly $460 million of spending, largely on the Las Vegas Grand Prix build, which we exclude from the normal level), $2.19 in 2024 and $2.60 in 2025. Only these three years exist on the current structure, so there is no longer history to draw on. We use the average of 2024 and 2025, about $2.39, and trim it to $2.33 because roughly 16% of MotoGP is owned by the former owners, who hold rights to sell it back to the company in stages starting on the third anniversary of the July 2025 closing. 2025 contained about six months of MotoGP and a one-time boost from the release of the F1 film, which is why we did not simply take the latest year. The cash flow statement reconciles exactly to net earnings plus non-cash items in both years. Owner earnings grew about 19% in 2025 but that was helped by the MotoGP acquisition and the film; our first-year growth is 4% in the base case, below that rate. Debt is not deducted from the value, because cash flow is already after interest; instead leverage is reflected in the bear case. Total debt is about $5.0 billion, floating-rate, with Formula 1 term loans due in 2029 and 2031 and MotoGP facilities of about $1.2 billion. THE THREE CASES Base case, about $51 per share: owner earnings grow 4% a year for five years, matching the contractual annual fee increases in race promotion, media and sponsorship contracts and the Concorde Agreement term through 2030, then 3% a year for five more years as those fee increases keep compounding on renewals. After year ten we assume earnings hold flat, rather than credit new growth, because the rights themselves run to 2110 and 2060 and Concorde Agreements have been renewed repeatedly since 1981, but nothing specific supports further growth. Bear case, about $30 per share: earnings start at the weaker 2024 level of about $2.10, ignoring the film boost, and do not grow for four years as team payments and event costs absorb the contractual fee increases (in 2025 Formula 1 costs rose about $249 million against revenue growth of $462 million). From 2030 the teams win a richer deal in the next Concorde period and the floating-rate term loans refinance at higher rates, cutting earnings by about 17% to roughly $1.75, flat thereafter. The MotoGP teams agreement also expires at the end of 2026 and has to be renewed. Bull case, about $62 per share: earnings start at about $2.50 and grow 6% a year for five years, using the demonstrated rise in sponsorship (18.0% of Formula 1 revenue in 2023 to 21.7% in 2025) and the up-to-5% race promotion escalators, then 4% for five years, and flat afterwards. WHAT WE LEFT OUT We gave no credit to MotoGP growth beyond its contracts, to new races, to the new Cadillac team, to a rising fan base or to margin gains, since none is contracted or has a long record. We also give no value to future acquisitions. WHAT COULD MAKE THIS WRONG The interim filing for the June 2026 quarter shows revenue of $934 million in the second quarter versus $1,341 million a year earlier, and contract liabilities (payments received in advance) rising from $263 million at year end to $1,117 million; operating cash flow for the half was still up to $673 million from $629 million. That pattern looks like a timing shift between quarters, but we could not confirm the cause from the annual filing, and if it reflected cancelled or lost events our estimates would be too high. Also, the MotoGP minority buyout price is set at fair value and could be a large cash call in 2028 and later, and the company carries $5 billion of debt.