Geopolitical conflicts threaten F1 race revenues
The bear case argued that escalating geopolitical instability in the Middle East poses a direct threat to Formula One Group's high-margin race promotion revenues.
The argument
The guest highlighted that F1 cancelled two major 2026 races in Bahrain and Saudi Arabia due to regional conflicts, wiping out an estimated $115 million to $200 million in revenue and $40 million to $80 million in EBITDA. They warned that if conflicts worsen, late-year races in Qatar and Abu Dhabi could also face cancellation.
The thesis, stress-tested
✓ What validates it
- ✓Cancellation or disruption of the scheduled Qatar or Abu Dhabi Grands Prix in late 2026
- ✓Official downward revisions to 2026 revenue and EBITDA guidance due to race cancellations
▸ Risks discussed
- ▸Inability to secure alternative host locations on short notice
- ▸Broader escalation of Middle East conflicts affecting global travel and logistics
Hear it yourself
"Overall, you know, it's not my favorite, I'll admit that, but I at least appreciate the long term investing, which at least keeps him on board for an extended period and hopefully incentivizes him to create shareholder value, which will increase the value of his options at the same time. Jason Esterholm (zero fifty seven:forty seven): Gosh, I'm guilty of thinking probably too simplistically or maybe idealistically at times when it comes to management compensation, but I'm just not sure why more companies can't get behind paying bonuses in cash with requirements that management then use the majority of that cash bonus to purchase stock in the company in the open market."
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