Busy Q3 boosts F1 revenues and profits
Formula 1 motor racing has recorded a 30-per-cent hike in third quarter revenue to $647 million as two extra races in the period compared with last year offset increased costs.
Operating income in the quarter came to $39 million, compared with a loss of $10 million in the third quarter, F1 owner Liberty Media's financial results have revealed.
Primary F1 revenue is comprised of race promotion fees, broadcasting fees and advertising and sponsorship fees, all of which increased due to eight of the season's 21 rounds taking place in the period, compared with six of 20 last year.
However, more races meant higher logistical and travel services revenue, and increased digital media and TV production related revenue.
Cost of F1 revenue rose 27 per cent to $451 million primarily due to higher team payments driven by the pro rata recognition of such payments across the race season, as well as increased costs associated with providing component parts to F2 and GP3 teams, fan engagement activities, freight, technical activities and digital media.
Selling, general and administrative expense increased 6 per cent to $38 million primarily as a result of increased marketing and research costs.
For the nine month period, revenue came to $1.35 billion, up 11 per cent, while there was an operating loss of $37 million, an improvement of 30 per cent year-on-year.
Greg Maffei, president and chief executive of Liberty Media, said: "F1 announced the 2019 race calendar, which includes the renewals of the Japanese and German race contracts, and just announced that a new race in
Liberty Media has vowed to put digital at the heart of its plans to revive Formula 1, and earlier this year it launched F1 TV, an over-the-top streaming platform offering a combination of free and subscription content, in various territories.
In September, the OTT platform was launched on mobile devices, and Chase Carey (pictured), Formula 1 chairman and chief executive, claimed F1 TV will begin reaping commercial benefits in 2019.
Speaking on an investor call, Carey said: "I think 2019 will really be the first time we bring it as a commercial proposition to market and sell it... We'll continue to add breadth and depth in terms of data and archival products."
Also in September, Formula 1 signed an agreement with Interregional Sports Group, the UK-based sports media agency, to develop an official betting platform for the sport, and attract sponsorship from the sector.
On that deal, Carey told investors: "It's clear fans enjoy it [betting], I think it makes it more interesting, more exciting... I think that type of engagement in a sport widens its appeal to others."