Teams to share $23m drop in income as F1 revenue falls

The Formula One Group's revenue fell in the second quarter of 2018 compared to the previous year, meaning all 10 teams' income will again drop as a result

Teams to share $23m drop in income as F1 revenue falls

Overall revenue for the group fell 5% in April-June compared with the same period last year, from $616million to $588m.

The slice of the pie shared by the 10 teams fell 7% from $330m to $307m, meaning they earned $23m less between them during the quarter.

F1's operating income was also down 69% from $45m to $14m.

There was no change in the number of races held in the quarter, with both 2017 and '18 featuring seven grands prix, but Liberty said one reason for the revenue fall is that last year the quarter's broadcasting fees represented a 7/20 share of the annual total, while this year, with an extra race, it is one third.

In addition last year the second quarter included one extra flyaway race, Russia, and such events are typically more lucrative than races travelled to by road. However, that was "partially offset by fee inflation in underlying contracts".

Liberty said income was boosted by a change in the way revenues from official partners and suppliers is recorded.

It noted that: "These fee elements were previously recognised pro-rata with the race calendar, but the majority are now being recognised evenly over the calendar year, and others over a smaller number of specific events.

"This change provided a modest tailwind to advertising and sponsorship revenue in the second quarter of 2018 but will be neutral on a full calendar year basis."

Sales of parts for the new generation of F2 cars also provided a revenue boost.

Liberty added the "cost of F1 revenue decreased modestly, driven by reduced team payments due to the pro rata recognition of such payments during the season, partially offset by increased costs associated with providing component parts to F2 teams and costs associated with increased fan engagement activities, freight, technical activities and digital media.

"Selling, general and administrative expense increased primarily as a result of increased marketing and research costs and foreign exchange movements."

F1 also repaid $125m of debt during the period.

Summing up the results, F1 boss Chase Carey said that an extended contract for the Belgian Grand Prix, and a new deal with Amazon Web Services, were among the highlights of the period.

"We successfully returned to France, at the Paul Ricard circuit, for the first time since 1990, and hosted our second fan festival for 2018," said Carey.

"We made progress across many fronts as we entered into an exciting global sponsorship agreement with AWS, renewed global sponsorship deals, renewed the Belgian GP and continued to expand on our digital content offerings."

shares
comments
The other men behind the Stroll-led Force India F1 team buyout

Previous article

The other men behind the Stroll-led Force India F1 team buyout

Next article

Lauda was days away from death before lung transplant, say doctors

Lauda was days away from death before lung transplant, say doctors
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