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F1 revenue fell by 13m in 2017

NEWS STORY
01/02/2018

While the world's media focusses on the contentious issue of F1 and grid girls, away from the spotlight it has been revealed that the sport's revenues fell by 13m in Liberty Media's first year at the wheel.

While 13m might not sound a lot when one considers the figures usually being bandied around the sport, it is significant and looks likely to herald further unrest among the teams.

In a letter to shareholders Liberty revealed that that "Formula 1 revenue for the year ended December 31, 2017 is expected to be down approximately 1% as compared to the prior year period.

"Full financial statements for this period will be filed on or before March 1, 2018," it added, "and prior to such time Liberty will not provide any additional details."

A year earlier, in 2016, the sport's revenue had increased by 5.8% to 1.3bn, hence the 1% equating to a 13m drop. For the last decade every year had seen an increase except for 2015 when revenues dropped by a comparatively meagre 3.3m to 1.2bn.

A number of factors contributed to the loss, not least the absence of the German Grand Prix, then there was the loss of sponsors Allianz and UBS, neither of which Liberty has managed to find a replacement for.

At the same time increased spending by Liberty, including a new London HQ and Ross Brawn's ever-expanding technical team, has taken its toll.

According to the Independent: "The letter to shareholders doesn't reveal the impact of the decline in revenue but F1's results for the nine months to the end of September showed that its operating loss doubled to 50m ($70m)."

This, of course, resulted in a drop in the prize money paid to the teams, a drop of 5.9% to 460m.

Hardest hit are Ferrari and Mercedes as their on-track performances and special bonuses mean they get more money than their rivals, but the other teams will feel the impact.

Under the guise of the proposed engine rules for 2021, Ferrari, Mercedes and Renault have already expressed unease, the Italian team even raising the prospect of heading to a breakaway series.

However, engine rules aside, it is money that matters, and Liberty's yet to be revealed plans for a significant shake up to how the prize pot is divided looks set to put a number of teams on a collision course with the sport's new owners.

News that the prize pot is already is decline is hardly likely to calm the waters.

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READERS COMMENTS

 

1. Posted by imejl99, 07/05/2018 11:28

"NFL is mentioned, so: there are 10 F1 teams multiplied by 21 races (games) multiplied by 2 drivers (players),
totaling 420 let`s call them "events of interest". F1 2017 revenue reportedly $1.3B gives little over $3M per EOI. NFL has 32 teams multiplied by 16 games multiplied by 53 players, totaling 27136 EOI (without playoff). NFL 2017 revenue reportedly $14B gives app $0.5M per EOI.

We, fans, are rewarding you 6 times more than NFL fan per "Event Of Interest".
Mr. Shoey, it is not our fault you overpaid."

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2. Posted by NickK, 02/02/2018 15:53

"Put a Brit in charge - these Americans just don't understand the sport they bought."

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3. Posted by imejl99, 02/02/2018 12:49

"Let`s wait for March 1st. We can only hope they won`t mess up financial statements as they did attendance numbers :))
Hint: look for "systematic error" aka simple math. "

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4. Posted by FQITW, 02/02/2018 12:09

"I can’t help thinking that Mr Chase has missed a trick here.
Surely with all those grid girls on their feet all day their legs must be killing them by the time they get home.
Had FOM supplied each one of these girls (at a special staff discount price of course) with a couple of pairs of Support Stockings they would be opening another year long revenue stream as well has being able to crow about looking out for women’s welfare.
After all they are both part of the same company aren’t they?
The stocking manufacturer and Formula One I mean.
"

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5. Posted by Fambank, 02/02/2018 8:06

"They couldn't afford the gridgirls any more, that's why they had to go. It all becomes clear now. ;)"

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