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F1 records $172m rise in revenue in Q3

NEWS STORY
05/11/2023

Third quarter figures for 2023 show F1 revenue of $887m (£716m) compared to $715m (£577m) in the same period last year.

Operating income is up 61% this year, when the third quarter had 8 races compared to the 7 in the same period in 2022.

Similarly, much to the delight of the teams, team payments are up 17%, with $432m (£349m) paid out compared to $370m(£299m) last year.

On the other hand, start-up costs related to the forthcoming race in Las Vegas are up 48% from $124m (£100m) in 2022 to $183m (£147m) this year.

Primary revenue increased in the third quarter with growth across race promotion, media rights and sponsorship partly driven by the 'extra' race - compared to 2022 - which resulted in a greater proportion of season-based revenue recognized, said Liberty Media in the statement accompanying the results.

Race promotion revenue also increased due to higher fees generated from the different mix of events held, with two additional races outside of Europe, and other contractual increases in fees.

Media rights revenue benefited from increased fees under new and renewed contractual agreements and continued growth in F1 TV subscription revenue.

Sponsorship revenue also increased due to recognition of revenue from new sponsors and growth in revenue from existing sponsors. Other F1 revenue increased in the third quarter primarily due to higher freight income driven by two additional races held outside of Europe and higher hospitality revenue generated from the Paddock Club, partially offset by lower licensing income.

The team payments were higher compared to 2022 due to the pro rata recognition of payments across the race season with one more race held, as well as an expectation of increased team payments for the full year.

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 due to higher hospitality costs driven by cost inflation and the mix of events held in the current period, as well as increased freight costs due to two additional races outside of Europe.

Other cost of F1 revenue in the third quarter was also impacted by increased technical, travel and other event-related costs due to one additional race, as well as increased commissions and partner servicing costs associated with higher Primary F1 revenue streams, certain early stage costs of promoting the Las Vegas Grand Prix and costs incurred for the new F1 Academy series.

Selling, general and administrative expense increased primarily due to higher personnel, property, IT and marketing costs, some of which is attributable to the Las Vegas Grand Prix, partially offset by lower legal costs and foreign exchange favourability.

There were $8m of costs associated with the planning of the Las Vegas Grand Prix included in selling, general and administrative expense in the third quarter of 2023.

"Formula 1 continues to experience sell-out crowds, record race attendance and strong growth across our social and digital platforms, outpacing that of other major sports leagues," said F1 CEO, Stefano Domenicali.

"This growth is attracting commercial partners, including our recent agreement with American Express that marks the first new sports vertical they have sponsored in over a decade.

"We are making material progress on our sustainability initiatives, including reducing F1's corporate emissions and amplifying F1 Academy by fully integrating the series into the 2024 F1 calendar with participation from all ten F1 teams."

"Growth", "commercial partners", "sustainability", "corporate emissions", "social and digital platforms" and "sports vertical", yet no mention of racing, far less passion. Welcome to F1 2023.

Check out our Sunday gallery from Interlagos City here.

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READERS COMMENTS

 

1. Posted by Superbird70, 05/11/2023 22:31

"Revenue does not equal profit"

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

2. Posted by Chester, 05/11/2023 12:26

"I am just so interested in corporate emissions, hoping that means a check in the mail from these corporations who are emitting.

But in the end, sounds like McKinsey has made their way into F1. We are all riding for a fall when consultant speak is rampant in OUR sport."

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