By Streisand Neto
LONDON, March 23 (Reuters) - The Middle East conflict has cut Formula One’s race calendar and battered the share price of its owner Liberty Media, but market analysts believe both will ride out the crisis with long-term prospects intact.
Since U.S.-Israeli strikes against Iran began on February 28, the U.S. firm's shares have slid 11.7% - about double the overall global drop - and lost $2.46 billion in market capitalisation while the Bahrain and Saudi Arabia Grands Prix have been
cancelled.
However, with F1 media revenue seemingly intact, the war hoped to be only short-term, and Middle Eastern nations likely to offer extra incentives to keep races in the region, both the sport and Liberty Media need not panic, analysts said.
"I think it’s a big overreaction ... the stock is discounting a loss of these events seemingly for many years," said Lance Vitanza, a managing director and senior analyst for U.S.-based investment bank and financial services TD Cowen who tracks Liberty.
The media, sports and entertainment company, led by new Chairman Robert Bennett, bought F1 in 2016 for $4.4 billion.
Liberty's portfolio also includes MotoGP, which rescheduled its Qatar Grand Prix from April to November due to the war.
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.
But despite those losses, the single-seater franchise should still pocket its revenue from media rights.
“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,” Ian Moore, an equity research analyst from Bernstein, told Reuters.
As long as F1 delivers over 16 races, they will still receive media rights payment given the multi-year agreements in place with broadcasters, he said.
VOLATILITY TO END?
Liberty Media did not respond to a request for comment.
In markets, there is also optimism the conflict, albeit in its fourth week, will be a one-off anomaly for F1 and its owner.
"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," said Moore.
And once security is restored, the Middle Eastern countries with an F1 circuit should be looking to rebuild tourism and restore their image with potentially higher promotion fees and other incentives for motor sports events in the region.
TD Cowen's Vitanza said that lower revenues in 2026 than last year could be a springboard for "dramatic growth" in 2027.
"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," added Peter Supino, a managing director and senior analyst of New York-based Wolfe Research.
"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."
(Reporting by Streisand Neto; Editing by Andrew Cawthorne)
