Electric car-racing series Formula E will exceed revenues of €200m ($219.4m) when it lodges its accounts for the 2018-19 period and will report a profit for the first time since its launch in 2014.
Having reported operating losses of €26.4m and €20.8m in the 2016-17 and 2017-18 periods respectively, Formula E has now announced that it will return a positive figure.
Alejandro Agag, Formula E’s chairman and founder, told The Financial Times that earnings before interest, tax, depreciation and amortisation for the period up until July 31 would be around €1m. This has been achieved, Agag said, without cutting the series’ marketing budget of around €30m.
Sponsorship, which accounts for close to half of all revenues, has enjoyed a 25-per-cent year-on-year increase given new deals signed during the 2018-19 period with Bosch, Heineken, Moët & Chandon and Saudi Arabian Airlines.
Agag told the Financial Times that sponsors “keep coming” and “renewing for longer and longer”, with a property they perceive as “definitely a bet for the future”.
On the financial results, he said: “Reaching break-even is a historic moment for us. For a business that almost didn’t make it after three races, now after 60 races we reach break-even – and with strong revenue growth – and that is going to continue.”
Revenues from ticketing, hospitality, media rights and host city fees have all grown rapidly in the last year, according to Agag.
During the 2016-17 accounting period, sponsorship revenues nearly doubled to €50m. Revenues from “broadcast and other race-related revenues” were €18.8m during that 12-month period, up from €13.2m in 2015-16.
However, Formula E didn’t reveal sponsorship and media rights specific figures in the set of accounts it lodged with Companies House for the 2017-18 period. Instead, the revenues of €133.4m for 2017-18 were listed as follows: €94.19m from race promotions and licensing income, €37.16m from race and service-related income, and €2.1m from other income.
In 2015, media giants Liberty Global and Discovery acquired minority shares in the nascent series, helping to solve cash-flow concerns and keeping the series afloat.
The series also announced today that a record total of over 400,000 spectators and ticket holders attended races in 2018-19, while viewing figures worldwide rose by 24 per cent to reach a “cumulative TV audience” of 411m across the 13 races.