Formula 1 was pleased to confirm a new important bump in revenue as the sport continues its ongoing process of recovering after the difficult seasons that were marked by the Covid-19 restrictions, which of course lead to significant losses in the previous years.
American mass media company Liberty Media, Formula One’s commercial rights holders, has reported a $47million increase in total Formula 1 revenue for the third quarter of 2022, standing at $715m as compared to $668m for the same period of the last year. During this time, several events took place both in 2021 and this season.
Based on data from last year, the figure is not as high as in the previous two quarters of 2022 as midway through last year, the sport was able to gradually return to normality and spectators were allowed to return to the venues and attend the Formula 1 weekends just like in the pre-Covid 19 period.
Liberty Media issued an official press release to inform about its financial reports:
“Throughout 2021, and particularly in the first half of the season, attendance at races was limited due to the pandemic. 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 fewer restrictions. The Paddock Club resumed normal operations beginning with the Austrian Grand Prix on July 4, 2021. F1’s results in 2022 are not being impacted by capacity limitations, and throughout the first nine months of the 2022 season F1 has seen strong growth in attendance in the grandstands and the Paddock Club. Primary F1 revenue increased in the third quarter with growth across media rights and sponsorship, partially offset by a decline in race promotion revenue. Race promotion revenue decreased due to lower fees generated from the different mix of events held, with one additional race held outside of Europe in the prior year period.” – the press release states.
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This situation resulted from the fact that the Russian Grand Prix was held last season and was then cancelled in 2022 due to the Russian invasion of Ukraine, which has had a disruptive effect on global markets. The French Grand Prix at the Paul Ricard circuit was in fact its replacement in the same quarter of 2022.
The statement continued:
“Media rights increased 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. Other F1 revenue increased in the third quarter primarily due to higher hospitality revenue generated from the Paddock Club, which operated at one additional race in the third quarter of 2022 compared to the prior year period and has seen record attendance year-to-date.”
At the same time, Formula 1 also had increases in operating expenses, as team payments went up from $338m to $370m, with other unattributed expenses increasing from $111m to $124m.
Formula 1 also confirmed a slight increase in operating income, up $2m from $80m to $82m
“These costs increased in the third quarter driven by the costs of higher hospitality attendance in the Paddock Club and one additional Paddock Club event operated compared to the prior year period. In addition, other costs of F1 revenue grew due to higher commissions and partner servicing costs associated with the primary F1 revenue streams and higher Formula 2 and Formula 3 related costs. Selling, general and administrative expenses increased in the third quarter due to higher personnel and IT costs and increased legal and other advisory fees.” – the Formula 1 official statement concluded.
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