F1 back in profit after two years of losses

The Formula One Group has reported a profit of $17 million for 2019, according to financial results posted by Liberty Media which bought the commercial rights to the sport for $4.4 billion at the end of 2016.

F1's overall income rose from $1,827 million in 2018 to $2,022 million last year. The positive news follows losses in 2017 and 2018 of $37 million and $68 million respectively, which Liberty put down to increased investment in areas such as expanding its digital media presence.

That means a decline in the income paid out to the ten teams can be reversed. Between them, teams earned $966 million in 2016, which dropped to $919 million in 2017 and then $913 million in 2018, but the latest figures see the amount paid out climb to a total of $1,012m million.

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The news couldn't have come at a better time for Liberty, which is still locked in talks with the teams and the FIA about the new Concorde Agreement that sets out the sporting, technical and business regulations governing the sport for the next ten years.

Even better, the boost in income has come from F1's primary business revenue streams made up of broadcast fees (38 percent) and sponsorship (15 percent), although race hosting fees were down (30 percent).

Income from non-primary streams also grew in 2019. Aggregate race attendance was reported to have risen by two percent to 4.2m, with social media followers up 33 percent to 24.9m and cumulative TV viewers rising nine per cent to 1.9bn.

"Broadcast revenue increased in the fourth quarter and full year due to contractual rate increases, partially offset by the impact of weaker foreign exchange rates," the financial report continued.

"Advertising and sponsorship revenue was relatively flat in the fourth quarter, [but] grew in the full year due to revenue from new sponsorship agreements.

"Growth in these revenue streams was partially offset by a decline in race promotion revenue in both the fourth quarter and full year.

"The fourth quarter decline in race promotion revenue was primarily due to the renewal terms of one contract," the report noted. "The full year decline was driven by the impact of renewal terms of two contracts and weaker prevailing foreign exchange rates.

"Other F1 revenue increased in the fourth quarter and full year 2019 driven by increases in digital media revenue, higher Paddock Club attendance, increased revenue from other event-based activities and higher sales of equipment, parts and maintenance to F2 and F3 teams."

However, costs had also risen. Liberty said this was "due to various technical initiatives, the continued further development and delivery of digital and social media products and platforms, increased costs related to the sale of equipment, parts, maintenance and other services provided to F2 and F3 teams, and higher FIA fees."

F1 CEO Chase Carey welcomed the results and said that it showed the sport was in rude health. "F1 continues to benefit from the investments made in the business over the past few years," he stated.

"2020 marks the 70th anniversary of the sport, which will provide further momentum," he added. "We see this in the strong financial results, viewership, attendance and engagement."

Liberty president and CEO Greg Maffei similarly praised F1's "exceptional financial results" and the way that it had added viewers and grown race attendance.

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