Monaco GP: Everything You Need To Know About The Business Behind F1’s Most Iconic Event
Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week. Today At A Glance:Formula 1’s Monaco Grand Prix takes place this weekend. So today’s newsletter breaks down everything you need to know, including the country’s unique partnership with Formula 1, the cost required to attend the race, its uncertain future, and more. This newsletter is also available via podcast on Apple or Spotify. Enjoy! Today’s Newsletter Is Brought To You By Hyperice!
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Monaco’s Unique (And Lucrative) Agreement With Formula 1Formula 1 has been racing through the pristine Monaco streets for nearly 100 years — and that long history has awarded Monaco a unique partnership with Formula 1. For example, Monaco reportedly only pays a $15 million per year hosting fee. That’s $5 to $40 million less than any other race on the calendar, and it makes the Monaco Grand Prix Liberty Media’s least lucrative race (from a pure profitability standpoint). Why? Because it’s important to remember that F1 is an extremely asset-light business, meaning they don’t own the teams, cars, or race tracks. Instead, they charge cities a hosting fee ($15 million to $55 million per year) and let them handle everything from ticket sales and concessions to parking, hospitality, and logistics. F1 Hosting Fees By Circuit (2022)
And Monaco also gets other advantages, too. Like its TV arrangement, which, up until this year, was entirely controlled by the local Monaco station Tele Monte Carlo. This angered fans — the broadcast often missed critical moments because they were showing random shots — and it’s one of the things F1 made a priority to change this year. And another is sponsorships, which are also fully controlled by Monaco and often directly clash with F1’s most significant partners. Take Rolex, for example. The luxury watch manufacturer has a $50 million annual sponsorship deal with F1, but they don’t get category exclusivity in Monaco, and Tag Heuer has significantly more track signage.
But even if Monaco has to eventually give up some of its control, its partnership with Formula 1 is still objectively a great deal, at least economically. That’s because Monaco’s population increases by 5x for the weekend — 36,686 to 200,000 — and the race is estimated to bring an annual economic impact of $110 million to the country. And with four luxury casinos, high-end stores like Louis Vuitton, Chanel, Hermes, and Dior, and nightclubs like 1 Oak charging $10,000 for nightly entry, the businesses in and around Monaco greatly benefit from this influx of out-of-town visitors. No Surprise: Tickets and Accommodation Aren’t CheapWith more than 12,000 millionaires living in a country smaller than New York City’s Central Park, the Monaco Grand Prix is routinely one of the most expensive races to attend on the Formula 1 calendar. There are only 37,000 tickets available — compared to more than 100,000 at the United States Grand Prix in Austin, Texas — and primary market tickets sell for anywhere between $160 for Friday’s practice to $16,000 for a 3-day luxury experience. Monaco Grand Prix Ticket Prices
And it’s not like the hotels are cheap either. Most people end up staying in Nice, France, because it’s only a 25-minute train ride away, and you can typically book a room for $300 to $400 per night. But it’s a different story if you want to stay in Monaco, with rooms at the legendary Hotel de Paris Monte Carlo costing $6,000 per night.
Come For The Cars, Stay For The YachtsOne of the most famous parts of the Monaco Grand Prix is the annual meetup of the world’s best superyachts. All 760 spots in Monaco’s Port Hercules will be full this weekend, with several $100 million-plus yachts circling the waters nearby.
These boats can expect to pay anywhere between $12,000 to $140,000 for a weekly spot during the Monaco Grand Prix. And when you factor in fuel, crew, maintenance, and food & beverage, it can cost more than $1 million to bring your superyacht to Monaco.
Of course, not every boat in Monaco this week is a superyacht. But the biggest boat, for many years, was a 316-foot yacht called Faith. The $200 million boat had a gym, theater, pool, sauna, jet skis, and helipad. Aston Martin CEO Lawrence Stroll owned it until he sold it to Michael Latifi, the father of former Williams driver Nicholas Latifi, and it rents out for a measly $1.5 million per week.
But with Nicholas Latifi no longer driving for the Williams F1 team, it’s unclear if Faith will be making the journey to Monaco this week (although the boat recently left San Juan, Puerto Rico, and is headed towards Europe right now). Still, there will be plenty of other impressive boats. Like Octopus, for example. The 414-foot superyacht previously owned by the late Microsoft co-founder Paul Allen is already docked in the Monaco Harbor and ready to go for the weekend. Octopus Superyacht Overview
Octopus also has room for 63 crew members, can cruise 9,000 miles before needing to refuel, and can be rented out for a weekly rate of $2.4 million before expenses.
Monaco Is (Kind Of) A Home Race For Many F1 DriversOne of the less talked about parts of the Monaco Grand Prix is the fact that many Formula 1 drivers don’t have to travel for the race. This is because nine of the twenty current F1 drivers already live in Monaco full-time, including Max Verstappen, Lewis Hamilton, Charles Leclerc, Lando Norris, Valtteri Bottas, Sergio Perez, Nico Hulkenberg, Nyck de Vries, and Alex Albon. Leclerc is the only driver that was actually born in Monaco, but many other drivers moved there after making it to Formula 1 for tax savings, privacy, and convenience.
And it also doesn’t hurt that Monaco’s weather is incredible, and the views are equally spectacular.
The Future of The Monaco Grand PrixWhile there are many positives to talk about regarding the Monaco Grand Prix — history, record viewership, media attention, etc. — there are also some negatives. For example, there were just two overtakes last year, and the race is frequently criticized for its lack of action. And when you combine that with Liberty Media’s initiative to grow the sport financially, many people question whether F1 will allow Monaco to remain on the calendar in its current form — aka with a long list of special privileges that make it the least financially rewarding race each year. Still, I wouldn’t expect the Monaco GP to be leaving the calendar anytime soon. The two parties (F1 and Monaco) recently signed a new deal that extends the race until at least 2025, and many people will have a problem if F1 eventually decides to cut ties. But that doesn’t mean F1 won’t eventually make Monaco make some concessions — whether that means paying an increased annual fee or giving up sponsorship control. Conversation Starters
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