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Formula 1 group makes bigger loss in 2018



The news comes as F1 and the teams continue to negotiate more and more complex on both the rules of the sport and trade agreements in the 2021 horizon and beyond.

Liberty Media's annual results, released on Thursday, indicate that F1 revenues have risen by about $ 44 million, from $ 1,783 million in 2017 to $ 1,827 million last season.

However, only $ 6 million of this amount was due to "principal receipts" – revenues from racing, television and advertising / sponsorship – the remainder coming from the "other receipts" heading.

After making a profit of $ 47 million in 2016, followed by a loss of $ 37 million in 2017, F1 has recorded an additional $ 68 million loss for the 2018 season.

Revenues paid to the 10 F1 teams continued to decline, from $ 966 million in 2016 to $ 919 in 2017 and $ 913 million in 2018.

Liberty notes that revenue from racing fees was "flat" despite 21 races versus 20 the previous year.

The company notes that the combined costs of the German and French sponsors did not offset the costs lost due to the absence of Malaysia.

"Promotion revenue increased slightly, mainly due to the contractual increase in promotion costs, as well as the change in the event contract, which included an increase in promotion revenue, which was fully offset by a reduction advertising products related to this event.

"This contract amendment was neutral for the total revenue of the main F1.

"In addition, revenues from the promotion of races in 2018 were affected by the change in the calendar, the non-occurrence of the Malaysian Grand Prix in 2018 not being fully offset by the return of two European races in France and in Germany. "

Liberty says his television earnings are also similar to those of the previous year and have been affected by problems with a partner.

"Broadcast revenues were essentially stable for the full year of 2018, as contractual rate increases and favorable currency fluctuations were offset by early termination of a contract with a broker. in defaulting broadcast rights. "

Crucially, Liberty admitted that advertising and sponsorship revenues, which it saw as a key growth area since the acquisition of the company, actually dropped in 2018.

"Revenues from new sponsorship agreements and the growth of certain contractual agreements did not fully offset the above-mentioned contract amendment, which included a reduction in advertising revenues fully offset by an equal increase in advertising revenues (which were neutral compared to primary income) ".

The increase in "other" revenues comes from several sources and is "mainly due to higher logistic revenues, digital media revenues and television production, revenue from various fan engagement activities and higher sales of spare parts for F2 and GP3 support series ".

Liberty pointed out that F1's performance was affected by rising costs, "the company continuing to invest.

"The cost of F1 revenues has increased mainly due to logistics and travel costs, higher costs of supplying the chassis and components to the F2 and GP3 teams, digital media development, and expense. commitment from the fans, who more than made up for the reduction in team payments. "

The company also reported being affected by bad debt associated with partners: "Selling, general and administrative expenses increased mainly due to higher marketing and research costs and higher bad debt due to payment problems with two trading partners ".


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