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Sterling's instability is good for F1

NEWS STORY
30/08/2016

Latest accounts reveal that the fluctuating value of the pound is good news for F1's finances.

At a time a number of potential buyers are taking a long, hard look at Formula One, with American billionaire John Malone's Liberty Media seemingly leading the way, the sport's parent company has seen its operating profit rise by $76.3m to $329.9m as the weak pound helps reduce costs.

"Most payments we receive from our counterparties under our commercial contracts are denominated in US dollars," reveal company documents, whereas costs, such as paying its 356 staff, are in sterling so as the pound falls it gets more for the dollars it receives and its costs reverse.

Accounts for Luxembourg-based Delta 2, whose main revenue streams are sponsorship, corporate hospitality, TV rights and race hosting fees, show that in the year-ending December 31 2015, total costs were down $77.5m to $1.3bn on revenue of $1.7bn.

"With average rates in force for the Euro and GBP some 16pc and 7pc respectively down on 2014, the group benefited from translating certain Euro and GBP denominated costs at those lower rates," F1's chief financial officer Duncan Llowarch tells the Telegraph.

As a result the eleven F1 teams will reap the benefit in terms of prize money as the pot increases 4.7 percent to a record $903.8m last year, though this falls short of previous estimates putting the pot at $965m.

All this, of course, comes at a time the sport has announced a number of major deals, including Sky's exclusive rights to broadcast F1 in the UK from 2019 and the (estimated) 173m deal with brewer Heineken which officially kicks off with sponsorship of the Italian Grand Prix this weekend.

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