Liberty's revenue up but F1 sides get less

Boss Carey says rights holder committed to sport despite its ballooning operating loss

LONDON • Formula One teams received less money from commercial rights holder Liberty Media for the second year in a row in 2018 despite a rise in the sport's revenues, according to annual results published on Thursday.

Total payments to the 10 teams fell to US$913 million (S$1.23 billion) from US$919 million in 2017 and US$966 million in 2016.

Although the F1 Group reported an increase in annual revenues to US$1.82 billion, up US$44 million from the previous US$1.78 billion, the operating loss grew from US$37 million to US$68 million.

Primary F1 revenue from race promotion fees, broadcasting fees and advertising and sponsorship was stable despite an increase from 20 to 21 races, with other revenue channels showing 13 per cent growth.

"Race promotion revenue increased modestly, primarily due to contractual increases in race promotion fees, as well as a contract amendment for one event," Liberty said. "This contract amendment was neutral for total primary F1 revenue.

"In addition, race promotion revenue in 2018 was impacted by the calendar variance, with the non-occurrence of the Malaysian Grand Prix in 2018 not fully offset by the return of two European races in France and Germany."

  • $1.23b

  • Combined payouts to the 10 Formula One teams, falling for the second year running.

Liberty added that advertising and sponsorship revenue had decreased for the full year.

The growth in other F1 revenue was due primarily to higher logistics revenue, digital media and TV production-related revenue as well as fan engagement activities.

The American company, which took over in 2017 and ousted former commercial supremo Bernie Ecclestone, said the bigger operating loss reflected increased expenditure on the business.

However, F1 chairman Chase Carey told analysts in a conference call that Liberty remained committed to the sport.

"For 2019, the drivers of revenue are clear, cost growth will abate and we expect leverage to decline significantly," he said. "We remain firm in our commitment to growing this business in creating value for the long term for the teams, our partners, F1 and our shareholders."

Chief executive officer Greg Maffei also emphasised that point, insisting Liberty was "confident the tremendous potential still exists".

On the track, however, there was better news with Fernando Alonso possibly making a full return to F1 next term after agreeing to test for his former team McLaren this year.

The double world champion stepped away from the sport in November after a couple of woeful years with the British team, in which he was saddled with an uncompetitive and unreliable car.

"At the moment, I feel at the peak of my career," he said. "So probably being at home is a waste of time. First for me, because I'm doing different, iconic races now. I also stay involved in F1 life, just in case."

The 37-year-old has previously said that he would race in F1 again only if it was in a competitive car but, with none of the top teams seeking his employment, his best hope is back with McLaren.

The team have shown improved speed in pre-season testing and appear to have a reliable car and, if McLaren prove they are not just making up the numbers this year, it is possible that chief executive Zak Brown could award the Spaniard with a race seat next year.

Meanwhile, Lewis Hamilton, who has won four of his five titles with Mercedes since joining from McLaren at the end of 2012, said yesterday that Ferrari could be half a second quicker, as Sebastian Vettel set the fastest time so far on the last day of pre-season testing.

REUTERS, THE TIMES, LONDON

A version of this article appeared in the print edition of The Straits Times on March 02, 2019, with the headline 'Liberty's revenue up but F1 sides get less'. Print Edition | Subscribe