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F1's financial recovery continues

NEWS STORY
07/08/2021

According to the second quarter financial reports, F1 is continuing to show positive signs of recovery in the wake of the pandemic.

In the second quarter of 2021 (April - June) revenue was $501m compared to just $24m in the same quarter in 2020.

Of course, due to the pandemic there were no races in Q2 2020, while there have been 7 so far in Q2 this year. While the $501m is a positive sign, it is worth noting that in Q2 in 2019, which also featured 7 races, revenue was $620m.

The operating loss in Q2 was $43m compared to $136m in 2020, though again, the operating loss in 2019 was just $14m.

With no races there were no team payments in Q2 2020, however this year the teams shared $308m, compared to $335 in 2019.

"Fan attendance continues to be assessed by relevant government authorities on a race-by-race basis," said Liberty Media in its results report. "A very limited number of fans were in attendance and there was no Paddock Club hospitality at races in the second quarter.

"While final decisions are pending for most upcoming events, fan capacity increased beginning in the third quarter and the Paddock Club hospitality resumed operations beginning with the Austrian Grand Prix on July 4th.

"Primary F1 revenue increased in the second quarter with growth in race promotion, media rights and sponsorship fees. This was due to the recognition of race specific and season-based income with seven races held in the second quarter of 2021 compared to no races in the prior year period. Media rights fees also benefited from growth in F1 TV subscription revenue.

"Other F1 revenue increased in the second quarter due to certain event-related activities associated with the seven races held in the current period compared to no races held in the prior year period, including higher freight, media and technical services, travel and Formula 2 and Formula 3 income. Licensing revenue also increased due to new contracts.

"Operating loss decreased and adjusted OIBDA increased in the second quarter. Cost of F1 revenue increased primarily due to the recognition of team payments in the second quarter, as such payments are recognized pro rata with the race calendar and no races were held in the prior year period.

"Other cost of F1 revenue is largely variable in nature and mostly relates to revenue opportunities. These costs increased in the second quarter due to seven races taking place, which drove higher technical, travel, freight and logistics, Formula 2 and Formula 3 and other related costs. The proportionate recognition of a full year of FIA fees also contributed to the increase in other cost of Formula 1 revenue during the second quarter. Selling, general and administrative expense increased due to higher personnel cost as no bonus was accrued in the prior year period, as well as increased marketing expense."

"Formula 1 is having an incredible season and the drama on the track is resonating with fans worldwide," said F1 boss, Stefano Domenicali. "The battle for the championship is intense and very close, evoking memories of some of the sport’s greatest rivalries of the past.

"We are seeing increasing numbers of fans tune in at home, and it is great to see the fans retuning to the races, with a sell-out crowd at Silverstone of 356,000 across the weekend marking one of the largest fan events in the world since COVID.

"We were very pleased with the first Sprint event and look forward to the next one in Monza, and we continue to prove, despite the challenges presented by the pandemic, that we can adapt and find solutions for the remainder of the season."

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1. Posted by Max Noble, 07/08/2021 13:16

"Magic Squares are things of beauty… especially when they operate in (at least) five dimensions…"

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