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F1 records $2.5bn revenue in 2022

NEWS STORY
01/03/2023

F1 revenue in 2022 was 20% up on 2021, while team payments were up 8% at $1.15bn (0.96bn).

At $754m (626m), revenue in Q4 2022 was down 4% on 2021 ($787m/654m), though over the full year it was up 20% at $2.573bn (2.138bn) compared to $2.136bn (1.774bn).

Of the $2.573bn, the teams received $1.157bn (0.96bn), compared to $1.068bn (887m) in 2021, while costs were $1.75bn (1,454bn) compared to $1.489bn (1.237bn) in 2021.

OIBDA (Operating Income Before Depreciation and Amortization) for 2022 was $593m (492m) up 20% on 2021, with a total operating income of $239m (198m), up 160% on 2021 when it was $92m (76m).

"Formula 1 saw record attendance at its races in 2022 and we were once again the fastest growing major sport on social media," said F1 CEO, Stefano Domenicali.

"We are continuing to build fan engagement through our high-quality broadcast, enhanced content on F1 TV, social channels and new immersive experiences including the F1 Arcade and F1 Exhibition products," he added.

"F1's global relevance and sustainability efforts are enticing the entry of premier OEMs including Audi and Ford in 2026, and we are confident they will bring significant value to our sport.

"We look forward to a record 23 race calendar this year including, in particular, the inaugural Las Vegas Grand Prix."

Indeed, according to today's report from Liberty Media, 2022's fan attendance of 5.7 million was up 36% compared to 2019, while the cumulative TV viewership was 1.54 billion, 36% up in the US while social media followers were up 23% to 61 million.

Primary F1 revenue of $2.107bn in 2022 represents the majority of F1's revenue and is derived from race promotion revenue, media rights fees and sponsorship fees.

For the year ending December 31, 2022, these revenue streams comprised 28.6%, 36.4% and 16.9%, respectively, of total F1 revenue.

There were 22 and 6 races held in the full year and fourth quarter of 2022, respectively, compared to 22 and 7 races held in the full year and fourth quarter of 2021.

The 2021 season was impacted by the pandemic, with attendance at races limited particularly in the first half of the season. Restrictions on fan attendance reduced as 2021 progressed, with all races in the second half of the year operating at either full capacity or with limited restrictions.

F1's results in 2022 were not impacted by capacity limitations, and consequently F1 had record growth in attendance in the grandstands and in the Paddock Club, with numbers well above pre-COVID-19 levels.

Primary F1 revenue grew for the full year with increases across all primary revenue streams. Race promotion revenue grew due to higher fees generated from the mix of events held, with three additional races held outside of Europe compared to 2021 and the return of capacity crowds, whereas limitations on fan attendance in 2021 led to one-time changes in the contractual terms of a limited number of races held.

Media rights revenue increased for the full year due to growth in F1 TV subscription revenue and increased fees under new and renewed contractual agreements, and sponsorship revenue increased due to the recognition of revenue from new sponsors.

Primary F1 revenue decreased in the fourth quarter, driven by lower race promotion and media rights revenue primarily due to the impact of one less race held in the fourth quarter of 2022 compared to the prior year period.

Race promotion revenue declined due to one less race held, as well as lower fees generated from the different mix of events on the calendar with only three of the same races occurring in both periods.

Media rights revenue decreased as contractual increases and growth in F1 TV subscription revenue were offset by the impact of lower proportionate recognition of season-based income (6/22 races took place in the fourth quarter of 2022 compared to 7/22 in the fourth quarter of 2021).

Sponsorship revenue increased as the recognition of revenue from new sponsors more than offset the impact of lower proportionate recognition of season-based income.

Other F1 revenue increased in the full year and fourth quarter driven by higher hospitality revenue generated from the Paddock Club, which operated at 19 races with record attendance throughout 2022 compared to 11 events during 2021, as well as higher freight revenue with more races held outside of Europe compared to the prior year and the impact of freight cost inflation on billing rates.

Other F1 revenue for the full year also benefited from the ability to undertake a greater scope of activities than was possible in the pandemic-affected first half of 2021.

Operating income and adjusted OIBDA(2) grew for the full year. Team payments increased for the full year driven by the growth in F1 revenue and the associated impact on the calculation of the team payments, which are 100% variable under the 2021 Concorde Agreement.

Other cost of F1 revenue is largely variable in nature and is mostly derived from servicing both Primary and Other F1 revenue opportunities. These costs increased in the full year primarily driven by higher freight costs with three more events held outside of Europe and underlying inflation on freight costs, increased Paddock Club costs associated with higher hospitality attendance and servicing eight additional Paddock Club events compared to the prior year, as well as higher commissions and partner servicing costs associated with increased Primary F1 revenue streams and higher Formula 2 and Formula 3 related costs.

Selling, general and administrative expense increased in the full year due to higher personnel and IT costs and increased legal and other advisory fees, as well as approximately $19 million of costs associated with the planning and launch of the Las Vegas Grand Prix.

Operating income and adjusted OIBDA decreased in the fourth quarter. Team payments decreased due to the impact of the pro rata recognition of such payments across the race season as one less race was held in the fourth quarter of 2022 compared to the prior year period. This was offset by increased Other cost of F1 revenue due to higher freight costs and costs associated with higher hospitality attendance in the Paddock Club. Selling, general and administrative expense increased in the fourth quarter primarily due to costs associated with the planning and launch of the Las Vegas Grand Prix.

The Liberty SiriusXM Group has an approximate 1.7% intergroup interest (4.2 million notional shares) in the Formula One Group attributed to it as of January 31, 2023. These shares are not included in the outstanding share count of Formula One Group in Liberty Media's most recent Form 10-K. Assuming the issuance of the shares underlying this intergroup interest, the Formula One Group outstanding share count as of January 31, 2023 would have been 234 million.

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READERS COMMENTS

 

1. Posted by ARL, 03/03/2023 20:15

"An 8% increase in team payments almost covers the need of 9% to accommodate an 11th team. Just saying."

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2. Posted by The stogie, 03/03/2023 0:11

"STOUT numbers!! Bodes well for the future of the sport."

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3. Posted by Italian Job, 01/03/2023 21:49

"It's excellent news that Liberty are "are continuing to build fan engagement...". I hope that in so doing they do not forget the enthusiasts who have followed motorsport since long before Liberty were founded."

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