Bernstein: F1 sponsorship monetization opportunity expands; WWE faces second-half growth hurdle

Where will F1's next wave of growth come from?

Bernstein believes F1 has expanded its global race calendar and audience over many years. The next phase focuses more on monetizing existing assets efficiently through sponsorship rights, licensing and premium experiences such as the Paddock Club, without substantially increasing the number of races or physical assets.
Sponsorship is the largest incremental opportunity the firm sees. It estimates that underdeveloped categories such as AI enterprise services, chips and hardware collectively offer about 300 million dollars in sponsorship opportunity, of which a global AI chip or hardware partnership could be worth about 60 million dollars a year.
Under the firm's model, F1 sponsorship revenue will rise from 840 million dollars in 2025 to 983 million dollars in 2026 and 1.157 billion dollars in 2027. The 2026 increase comes from new partnerships, contractual escalators and expansions of existing partnerships; the 2027 model also assumes a new global AI partner or other deals.
Growth has not proceeded entirely as originally planned: one sponsorship deal failed to materialize, prompting Bernstein to cut its 2026 sponsorship revenue forecast by about 20 million dollars and its operating income before depreciation and amortization (OIBDA) forecast by about 12 million dollars.

Broadcast rights offer relatively clear contractual growth. Bernstein expects F1 broadcast rights revenue to rise from 1.212 billion dollars in 2025 to 1.298 billion dollars in 2026, driven mainly by new agreements, renewals and contractual escalators.
The US Apple agreement is an important source of incremental revenue in 2026, but after the existing US F1 TV subscription business is folded into the agreement, the firm estimates a net increase of about 30 million dollars, rather than treating the full value of the new contract as growth.
Licensing and premium experiences offer longer-term monetization opportunities. Bernstein estimates that licensing still accounts for only a small portion of F1 revenue; assuming new deals are worth roughly the same as existing ones, the potential licensing opportunity is about 200 million dollars. Paddock Club capacity expansion and new experiences can also increase revenue, with The Out Lap separately priced as an add-on to a Paddock Club pass.

The Middle East conflict has reduced F1's 2026 calendar from 24 races to 23 and affected race hosting fee revenue; whether the Qatar and Abu Dhabi races can take place is also uncertain. Bernstein estimates that the latter two races account for more than 100 million dollars in total race hosting fee revenue.
The firm believes relocating at least one race could cushion the near-term impact; using Imola as a reference, the associated economic benefit could be about 30 million dollars. It has greater confidence in a full 2027 calendar because the league has more time to secure assurances from partners and arrange alternative venues.
UFC and WWE have already shown a willingness to continue holding events in the region during the conflict, leading Bernstein to believe their operational resilience may be stronger than previously expected.

Bernstein believes long-term sponsorships and partnerships can also enhance UFC and WWE's commercial value, but WWE's near-term growth depends heavily on the second half: partnership and marketing revenue was 89.4 million dollars in the first half of 2026, up 6.6% year on year, below the pace needed to meet management's full-year growth guidance of more than 20%.
By the firm's calculations, to achieve full-year growth of about 20%, second-half revenue must rise to about 102 million dollars, an increase of about 13 million dollars from the first half. International events such as those in Riyadh and Perth contribute the bulk of the expected increase, with new agreements and renewals making up the rest; if international events are weak or new agreements progress more slowly, the low end of guidance will come under pressure.
Near-term profit forecasts also reflect changes in costs and timing: Bernstein cut its third-quarter UFC EBITDA forecast by 12 million dollars because of higher McGregor-related costs; it also cut its third-quarter WWE forecast by 10 million dollars because of softer ticket sales and sponsorship revenue weighted more toward the fourth quarter, while raising its fourth-quarter forecast by 18 million dollars.
Bernstein maintained its Outperform ratings on Liberty Media and TKO, with price targets of 120 dollars and 240 dollars per share, respectively.