As a result of the ongoing crisis in the Middle East, major events in the gulf countries have been postponed or even cancelled, which has negatively impacted many parts of the nations. Two of these, the cancellations of Formula One (F1) Grand Prix races held in Bahrain and Saudi Arabia, have caused economic obstacles for both the host nations and F1 as a whole.
Bahrain and Saudi Arabia’s economies heavily rely on tourism. Over the course of the year, these nations schedule key events that bring in income to support the country. Formula One events bring fans from all over the world, so it is not surprising that these tourism-reliant countries signed long-term contracts with the sport. Saudi Arabia signed a ten-year contract, ending in 2030; and Bahrain’s contract expires in 2036. The sport brought 105,000 attendees to the Bahrain GP in 2025. While the official attendance for the Saudi Arabian GP wasn’t released to the public, years prior estimated between 150,000 to 200,000 spectators.
With any major event, the associated tourism affects social and economic aspects of the host country. Local restaurants and businesses will certainly take a financial hit as a result of these cancellations. Similarly, here in Louisville for the 152nd Kentucky Derby, the decision to change the race time to much later in the evening had negative impacts on local businesses. For example, Pat Francis closed down his family-owned steakhouse during the event in protest. He believed it was a corporate cash grab by the owner of Churchill Downs that changed a long-standing community event.
“They are trying to cut us out of the equation. It’s terrible for small businesses,” Francis said.
While the cause of the situations could not be more different, they do have many similarities within the realms of small business. Bahrain and Saudi Arabia, among other gulf countries, strive to heighten their roles in the global tourism market. These cancellations hinder the goals for an influx of tourism, investment opportunities, and to prove themselves as regional powerhouses.
Saudi Arabia and Bahrain are being impacted by the conflict in the Middle East, but so is F1. A report by Guggenheim– an investor in the Cadillac F1 team– analyzed the revenue hit for the sport. The combined losses from both races are estimated between $190-200 million of revenue and $80 million of EBITDA (Earnings Before Interest, Taxes, and Amortization). Although this seems like a significant amount of money, it is only a small dent in the overall season revenue for F1.
In 2025, the season revenue had an increase of 14% from 2024 to an estimated $3.87 billion. This little dent may seem insignificant in the overall picture of the sport, but sponsors and partners are heavily impacted. These companies lose exposure, marketing campaigns and waste hospitality opportunities and, as a result, teams are forced to renegotiate contracts with them.
Saudi Arabia and Bahrain are two of the highest-paying rounds of the F1 season. Contributing a combined $100 million per year in hosting fees. Due to these cancellations, teams will be directly impacted by decreased prize money. Hosting fees generated from races last year made 26.7% of the sports $3 billion in revenue. $1.4 billion of that money was deposited back into the teams via prize money.
“There’s a very large impact in terms of prize fund,” explained Racing Bulls team principal Alan Permane. “Of course, not having two races will hurt everybody. But there’s a benefit in terms of cost in not going to those races, because we don’t send people, so there’s obviously no flights, no hotel costs and no freight costs.”
While some figures in the sport are looking on the bright side of the unfortunate event, F1 is considering rescheduling these races in order to make up for the lost revenue. This would only be possible if the world returns to a “normal situation.”
“The well-being of everyone in F1 comes first,” Liberty Media CEO Derek Chang said. “We always manage the calendar with that principle in mind. While that creates a near-term financial impact, it does not change our confidence in the sport’s long-term trajectory.”
However, if the war settles down enough for an enormous event to take place, then a new question emerges: when will it be scheduled? The grueling calendar of Formula One leaves very little space for a race to be added. If there was a place that one could be squeezed in, then the matter of driver and worker’s well being may be put into question.
The most straightforward weekend to reschedule the event would fall at the end of the season, where an exhausting triple header takes place. Adding this event would result in four weekends of straight racing. The timezone shift and physical strain on the drivers would make it ethically questionable to add another weekend to their calendars.
“We obviously all hope that this conflict ends shortly, but hope is not a great strategy. So you do need to have a strategy,” Zak Brown the chief executive of Mclaren Racing said.
The ongoing conflict in the Middle East has had significant effects on the economy of host countries and F1. If the leaders of F1 decide to add another race weekend later this year, assuming that the war will have calmed by then, the host countries wouldn’t see as large of an economic impact, but there will still be one nonetheless.
