Formula One income drop impacts teams to the tune of $47m. Chase Carey reiterated his positive outlook for Formula One as management builds out its vision to boost revenue.

The Formula One Group announced its full results for fiscal year 2017 which saw a decline in revenue of $12m from $1,796m to $1,784m. The revenue drop was the result of 20 races taking place in 2017, one less than the previous year, a lower franchise fee associated with the Brazilian Grand Prix and a shortfall in sponsorship revenue following the loss of commercial partners UBS and Allianz.

With regard to earnings, profits eroded in 2017 as Liberty Media ramped up its corporate expenses, relocating to new offices in London and significantly increasing headcount: “Cost of F1 revenue increased primarily due to spend on fan engagement, filming in Ultra High-Definition and higher freight costs, which more than offset reduced team payments,” Liberty Media reported in its company filings – “Selling, general and administrative expense also increased for the fourth quarter and full year 2017 as a result of additional headcount and new corporate offices.”

Team have taken note of Liberty Media’s continued strategy of investing in the sport, although Irish-American executive Chase Carey is hopeful of “improving our balance sheet and maximising our long-term cash flow” in 2018: “We have settled into our new London headquarters. With headcount currently around 120, expecting to settle around 150 by mid-to-late 2018. Overall we expect the associated incremental step-up in overhead to be $50m annually compared to 2016, excluding marketing and development expense tied largely to new initiatives.”

A year ago we had over $4bn in external gross debt, and today we’re at $3.2bn, with approximately $115m in annualised interest savings and an improved tax structure: “We also eliminated the potential overhang in prior share sales from prior F1 owners.”

Looking ahead, Chase Carey reiterated his positive outlook for Formula One as management builds out its vision to boost revenue and income: “We were positively surprised by the excitement from existing partners to expand and grow their relationships with us, and the level of interest from new commercial sponsors. There’s real enthusiasm from new potential sponsors, promoters and video entities to engage with F1. Many of these will take time to develop in the right way, and our priority again is building long-term value, not a short-term buck.” – the chief executive officer and executive chairman of the Formula One Group concluded, as reported by the British media earlier today.