Motor-racing championship Formula 1 saw its operating income rise by $5m (€4.54m) year-on-year, despite a fall in revenue, as this was offset by reduced costs.
The figures were revealed as F1’s parent company, US mass media group Liberty Media detailed its third quarter results for the period ending September 30, 2019. The F1 side of the business saw primary revenue fall from $560m to $553m, while other revenue declined from $87m to $80m.
Primary F1 revenue is comprised of race promotion fees, broadcasting fees and advertising and sponsorship fees. Liberty said results in the third quarter of 2019 were unfavourably impacted by the timing of the 2019 race calendar, with seven races taking place in the third quarter of 2019 compared to eight races in the third quarter of 2018.
Race promotion revenue decreased due to one less race held in the third quarter of 2019 and the impact of the renewal terms of one contract. However, broadcast revenue increased primarily due to contractual rate increases, partially offset by the lower proportionate recognition of season-based income during the quarter.
Advertising and sponsorship revenue increased due to revenue from new sponsorship agreements. However, other F1 revenue decreased in the third quarter, again primarily due to one less race being held, along with non-recurring television production fees in the prior year period.
Operating income increased year-on-year from $39m to $44m as the revenue decline was more than offset by reduced costs. Team payments reduced from $344m to $335m driven by the pro rata recognition of such payments across the race season, and other cost of F1 revenue was lower due to one less race in the quarter.
The figures for Formula One Group, which comprises F1, along with Liberty’s interest in Live Nation, minority equity investments and an inter-group interest in the Braves Group, ownership body of Major League Baseball (MLB) franchise the Atlanta Braves, detailed a slight rise in operating income from $31m to $32m. Revenue fell from $647m to $633m.
Commenting on the results, F1 chairman and chief executive, Chase Carey, said: “We were thrilled to have the World Motor Sport Council unanimously approve the 2021 regulations, which were the result of input from all stakeholders across the sport of Formula 1.
“We believe these regulations stay true to the DNA of Formula 1 while seeking to improve the competition and action on the track. This season continues to produce some spectacular racing and we congratulate Lewis Hamilton and Mercedes on their amazing achievements.
“We now look forward to the final two races of 2019 and a record 22-race 2020 season, including our new event in Vietnam and our return to the Netherlands.”