Why F1 Can’t (and won’t) divorce from racing in the Middle East

Team	Gulf Investor	Stake type
McLaren	Mumtalakat (Bahrain)	Majority in McLaren Group
Aston Martin	Public Investment Fund (Saudi Arabia)	Minority stake
Audi	Qatar Investment Authority	Minority stake through Volkswagen
McLaren	UAE	Minority stake

All four countries have an interest in the sport in their region, as it drives revenue to their countries and to their teams. The Gulf States aren’t just hosting partners, but actual owners of parts of more than a third of the F1 grid.

Commercial partnerships

Not only do these countries own teams and pay big money to host races, but they also use their nationally-owned brands as corporate partners in F1. The Saudi Arabian Oil Company, Aramco, is a major one, on display at numerous races across the grid. Aramco is also a technical partner of the sport, co-developing a sustainable fuel option for F1 cars with Aston Martin.

While sponsors may come and go, losing a major R&D partner would be a big loss for the sport and compromise the work they have done to go green. Aramco and the Saudi PIF are both owned by the Saudi Royal Family, while the head of the Saudi Automobile and Motorcycle Federation (SAMF), the promoter of the F1 race in Jeddah, is a member of the royal family as well.

There is also a major sponsorship with Qatar Airways, the country’s national airline. This includes title sponsorship of three races, two of which are outside the region, as well as partnership with Alpine, including its sponsorship of F1 Academy. There is also the ongoing partnership in developing sustainable aviation fuel, which is another major R&D initiative that it is working on with F1.

Logistical hegemony

F1 has anchored their season at both ends in the Middle East. Teams start their preseason testing at Sakhir in Bahrain, do three races in East Asia and Australia, then come back to the Middle East for two more. This allows teams to anchor the start of their season in the region.

The race calendar then wraps up in the region with the Qatar Grand Prix and Abu Dhabi Grand Prix, hosting possibly the two most pivotal races in the region. With Liberty Media having the ability to wrap up their season anywhere in the world, choosing to have it in this region is a clear show of how connected they are to the Gulf countries.

F1s reputation versus financial gain

None of this connection is accidental by either party. F1 has actively sought out funding from the Gulf nations, and these countries have found a very willing partner in Liberty Media. For countries in the region, hosting F1 races has historically been used as a soft power tool. This way, they are able to show themselves to be safe tourist destinations. This attracts investment from around the world, but also legitimizes the monarchies both to their own citizens and around the world.

All of these initiatives taken together are how sportswashing exists in Formula 1. The Gulf Monarchies use their connection to F1 and the races in their nation to grow their tourism sector and hide their human rights records away. F1’s use in sportswashing is nothing new, and has been studied in numerous reports, including this one from the Australian Human Rights Initiative, but it is a major area of concern for the sport’s reputation.

What does Liberty Media get out of its relationship with the Gulf Monarchies?

Liberty Media, meanwhile, found a willing financial partner, one who is willing to pay high hosting fees and heavy sponsorship charges to be able to further their own legitimacy. For the parent company of F1, this means higher stock prices and, most importantly, fewer questions from happy investors.

F1’s stock price is heavily tied to both current revenue and long-term contracts projecting future revenue. The earliest expiring contracts for the Middle East races are 2030 for Abu Dhabi and Saudi Arabia, with the latter expected to move venues to a new track in the country. There is virtually no chance Abu Dhabi will not be renewed either, given how important the country and region are to the sport.

Contract law typically allows for either party to use force majeure as a reason to cancel or postpone, but to fully cancel a race would be a massive breach of contract by Liberty Media. Even if they wanted to cancel these agreements, the sovereign wealth funds of these nations are each worth more than Liberty Media and would have an army of lawyers in place to fight that. These contracts are remaining.

Both sides value the relationship between F1 and the Gulf countries

Even with the postponement or cancellation of these races, Formula One has been clear to talk about the importance of the relationship between the two sides. FIA President Mohammed Ben Sulayem said, “Bahrain and Saudi Arabia are incredibly important to the ecosystem of our racing season, and I look forward to returning to both as soon as circumstances allow”.

Even beyond the expanded connection between F1 and the four Middle Eastern states, the two sides seem to have a good connection, and even if the war continues on indefinitely, there is little to expect that the relationship between the two sides will end.

F1 has permanently pivoted its brand and appeal

If you are a long-time fan of F1, the sport clearly looks quite different from how it did before Liberty Media acquired it. Gone are the days of a European-centred sport with locations around the world, but instead a global sport with a major presence in the Middle East. While Liberty Media has made a strategic pivot towards the United States and has made major investments, particularly in Las Vegas, it is still connected so closely to the Middle East.

While the region is facing turmoil, this is far from the first time it has faced issues, and odds are it won’t be the last. Racing will undoubtedly return to the region in due time. This is a longer, unexpected break than anyone wanted, but it’s not a break-up. F1 and Liberty Media simply cannot afford to walk away from the region, and the region has too much tied up in Liberty Media to walk away either.