Formula 1 reveals size of drop in team payments in Liberty year one

The 10 Formula 1 teams collectively received $47million less than the previous year during the first season of Liberty ownership

Formula 1 reveals size of drop in team payments in Liberty year one

Though the downward trend in F1 income had been known for some time, publication of the F1 Group's fourth quarter results for 2017 provides the full official picture.

Payments to teams fell 5% from $966m in 2016 to $919m, the first time that team income has gone down.

Liberty also revealed that the F1 Group's overall revenues fell by $12m from $1796m to $1784m.

The drop in revenue reflects the fact that there were 20 grands prix in 2017 rather than 21 as the previous season.

In addition, before he left Bernie Ecclestone agreed that the Brazilian GP would pay a lower fee than originally planned from 2017 onwards.

F1 also lost two major sponsors, UBS and Allianz, during the transition from Ecclestone to the Liberty era.

The biggest impact on team payments is the rise in costs, with Liberty moving to a new London HQ, massively expanding staffing levels, and spending on activities such as the F1 Live in London event.

Liberty noted: "Cost of F1 revenue increased primarily due to spend on fan engagement, filming in ultra high-definition and higher freight costs, which more than offset reduced team payments.

"Selling, general and administrative expense also increased for the fourth quarter and full year 2017 as a result of additional headcount and new corporate offices."

The teams have questioned whether some of that expenditure should have come from new investment by Liberty, rather than from their own income.

Autosport revealed in October that the six Strategy Group teams put their objections to Liberty in writing, and the debate has continued since then.

F1 CEO Chase Carey has made it clear that the hike in running costs relative to the Ecclestone era will be ongoing.

"We've settled into our new London headquarters," he said on Thursday.

"With headcount currently around 120, expecting to settle around 150 by mid-to-late 2018.

"Overall we expect the associated incremental step-up in overhead to be $50m annually compared to 2016, excluding marketing and development expense tied largely to new initiatives."

Carey said that one of F1's goals for 2018 was "to improve our balance sheet and maximise our long-term cashflow.

"A year ago we had over $4billion in external gross debt, and today we're at $3.2bn, with approximately $115m in annualised interest savings and an improved tax structure.

"We also eliminated the potential overhang in prior share sales from prior F1 owners."

Carey remains bullish about the prospects of boosting F1's income.

"We were positively surprised by the excitement from existing partners to expand and grow their relationships with us, and the level of interest from new commercial sponsors," he said.

"There's real enthusiasm from new potential sponsors, promoters and video entities to engage with F1.

"Many of these will take time to develop in the right way, and our priority again is building long-term value, not a short-term buck."

shares
comments
Pirelli reveals schedule and teams for testing of 2019 F1 tyres

Previous article

Pirelli reveals schedule and teams for testing of 2019 F1 tyres

Next article

New F1 theme music to be written by Hollywood composer

New F1 theme music to be written by Hollywood composer
Load comments

About this article

Series Formula 1
Author Adam Cooper
The delay that quashed Aston Martin’s last F1 venture Plus

The delay that quashed Aston Martin’s last F1 venture

Aston Martin’s only previous foray into Formula 1 in the late 1950s was a short-lived and unsuccessful affair. But it could have been so different, says NIGEL ROEBUCK

Formula 1
Apr 10, 2021
Verstappen exclusive: Why lack of car-racing titles won't hurt Red Bull's ace Plus

Verstappen exclusive: Why lack of car-racing titles won't hurt Red Bull's ace

Max Verstappen’s star quality in Formula 1 is clear. Now equipped with a Red Bull car that is, right now, the world title favourite and the experience to support his talent, could 2021 be the Dutchman’s year to topple the dominant force of Lewis Hamilton and Mercedes?

Formula 1
Apr 9, 2021
Are we at peak F1 right now? Plus

Are we at peak F1 right now?

For many, many years Formula 1 has strived to do and to be better on all fronts. With close competition, a growing fanbase, a stable political landscape and rules in place to encourage sustainability, 2021 is on course to provide an unexpected peak

Formula 1
Apr 8, 2021
How crucial marginal calls will decide the Red Bull vs Mercedes battle in F1 2021 Plus

How crucial marginal calls will decide the Red Bull vs Mercedes battle in F1 2021

The longer Red Bull can maintain a performance edge over Mercedes, the better the odds will be in the team’s favour against the defending world champions. But as the Bahrain Grand Prix showed, many more factors will be critical in the outcome of the 2021 Formula 1 World Championship

Formula 1
Apr 7, 2021
How Williams’ new structure adheres to a growing F1 trend Plus

How Williams’ new structure adheres to a growing F1 trend

Williams held out against the tide for many years but, as MARK GALLAGHER explains, the age of the owner-manager is long gone

Formula 1
Apr 6, 2021
When a journeyman driver's F1 career lasted just 800m Plus

When a journeyman driver's F1 career lasted just 800m

Nikita Mazepin’s Formula 1 debut at the Bahrain Grand Prix lasted mere corners before he wiped himself out in a shunt, but his financial backing affords him a full season. Back in 1993 though, Marco Apicella was an F1 driver for just 800m before a first corner fracas ended his career. Here’s the story of his very short time at motorsport’s pinnacle

Formula 1
Apr 4, 2021
The nightmare timing that now hinders Mercedes Plus

The nightmare timing that now hinders Mercedes

Mercedes and Lewis Hamilton took victory at the Bahrain Grand Prix despite, for a change, not having the quickest car. But any hopes of developing its W12 to surpass Red Bull's RB16B in terms of outright speed could not have come at a worse time.

Formula 1
Apr 2, 2021
How Raikkonen's rapid rise stalled his team-mate's F1 career climb Plus

How Raikkonen's rapid rise stalled his team-mate's F1 career climb

Kimi Raikkonen’s emergence as a Formula 1 star in his rookie campaign remains one of the legendary storylines from 2001, but his exploits had an unwanted impact on his Sauber team-mate’s own prospects. Twenty years on from his first F1 podium at the Brazilian GP, here’s how Nick Heidfeld’s career was chilled by the Iceman

Formula 1
Apr 1, 2021