"The balance sheet is very, very strong," insists Liberty boss

01/03/2021
NEWS STORY

Liberty Media boss, Greg Maffei basically adopts a 'nothing to see here' stance despite the sport posting a record $386m loss last year and revenues down by 44%.

It would be all too easy, to cheekily adapt many of the numerous headlines spotted in recent days and add the 'fixed that for you' tag.

Looking at the various soundbites from senior F1 people one would assume that everything in the F1 garden is rosy.

Of course, Chase Carey did them no favours when he insisted on putting together a 23-date calendar at a time there was no end to the pandemic in sight. His successor, Stefano Domenicali forced to accept the poisoned chalice, insisting that it will all work out.

Now, Liberty CEO, Greg Maffei has now joined in the fun and games, insisting that, at a time team payments were down 30%, he is "not really worried" by the sport's $386m loss last year… though, as one can almost see his fingers crossed tightly behind his back, he is quick to add the pandemic caveat.

"I think one of the things about being part of the Liberty group is we have the ability to hopefully look ahead and be thoughtful with the benefit of our operating companies," he told business analysts in a conference call following the release of the figures.

"The F1 balance sheet is very, very strong," he insisted. "I think the operating levels that we have in our agreements are fine. So I'm not really worried about the balance sheet."

At a time the likes of Silverstone boss, Stuart Pringle is anticipating a 'return to normal' in terms of attendance at this year's British Grand Prix, Maffei admits that the virus will continue to threaten spectator numbers.

"We're going to have a variety of alternatives where fans will be to some degree there," he said. "And I don't think it will be binary, we're not necessarily going to see zero to one hundred.

"But we'll be somewhere potentially in between," he continued. "So I'm more optimistic as we go to the end of the year that we're going to get to one-hundred percent of capacity.

"I think promotion will be still reduced in '21," he admitted, referring to income, "certainly versus what we would have in a non-pandemic year. We will have restricted audiences, and restricted fans at some of our events.

"We're not here to make a forecast, in part because some of this is still up in the air, floating around. It'll definitely be impacted, the amounts to which we'll see.

"We aren't in the crystal ball business exactly," he added. "But we are in the business of trying to prepare to make sure we benefit when it does open, and that we're prepared if that doesn't happen at the rate of change or pace that we would like."

In terms of broadcasting, one of the sport's other main revenue streams, he said: "We expect a fairly normal broadcast revenue stream in light of our 23 races.

"Again, no crystal ball about exactly how COVID plays out," he admitted. "But our goal was to try and take the pain in '20, to the degree that we rightly had to make concessions to some of our broadcasters. Our goal was to do as much as possible to make that a '20 event, and bring '21 back to normal.

"That is our hope and our expectation. But COVID could change that, as a warning."

Looking at the bigger picture, Maffei was keen to stress the importance of the teams signing up to the new Concorde Agreement.

"Going forward, with the new Concorde Agreement we have a structure which as we increase profitability, we have the opportunity to take back some of what historically F1 earns," he said.

"Over the years, the rates get a little more attractive for us," he added. "Whether we'll hit that in '21, given the risks around pandemic, I'm not as confident, but in the years going forward, as we continue to have a fully healthy business, I do believe our share of the margin will slightly increase."

Despite all the positivity, the fact is that F1 is not turning out quite how Liberty Media expected, which, of course, accounts for speculation that the American company is already looking for a potential buyer.

Indeed, there will have been some serious twitching late last week following the release of the report which found that the Crown Prince of Saudi Arabia ordered the killing of journalist Jamal Khashoggi.

Had the US imposed sanctions, Liberty faced the prospect of losing close to 10% of its revenue courtesy of Aramco and the Saudi Promoter which are both directly controlled by the Crown Prince.

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Published: 01/03/2021
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