The Formula One Group published its 2018 second quarter results on Wednesday, revealing a $23 million revenue drop for the sport's ten teams.
For the April-June period, F1 generated revenue of $588 million, or $28 million less than in the same period in 2017. The revenue allocated to the ten teams dropped from $330 million to $307 million, or a $23 million difference year-over-year.
Overall, F1's operating income was down 69% from $45 million to $14 million.
The Formula One Group justified the revenue drop by "variations in revenue recognition, timing of the races, the number of races and the nature of the business".
The second quarter's share of broadcasting fees represented a 7/21 proportion of the annual total while in 2017 it represented a 7/20 share of the overall amount of races.
The absence in this year's second quarter of the lucrative Russian GP (scheduled in 2018 in September) also weighed on Q2 numbers, although the shortfall was "partially offset by fee inflation in underlying contracts."
Liberty noted that "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."
Formula 1 also took down its debt levels in Q2, enjoying a decrease of $354 million as a result of debt repayment. During the second quarter, F1 repaid $125 under its revolving credit facility.
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"It's been a successful season on the track, with competition at the top, among both drivers and teams, as well as a number of exciting dramatic races," F1 CEO Chase Carey said on the company's conference call with investors.
“We successfully returned to France, at the Paul Ricard circuit, for the first time since 1990, and hosted our second fan festival for 2018.
“We made progress across many fronts as we entered into an exciting global sponsorship agreement with AWS (Amazon Web Services), renewed global sponsorship deals, renewed the Belgian GP and continued to expand on our digital content offerings.
"We're also encouraged by the momentum in fan engagement as we begin to turn around the declining trends in the sport during the last five to six years," added Carey.
"Live attendance in aggregate is up 4% year-on-year at the 10 tracks where we weren't raced last year and attendance at the two tracks we did not have in 2017 which are France and Germany, was well in excess of expectations."
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