Liberty Media completed its takeover of F1 back in January 2017, with Chase Carey taking over as the series’ CEO and chairman from long-standing ringmaster Bernie Ecclestone, as Formula 1 has embarked on a number of new expansion plans, including the setup of a new office base in central London, undertaking a recruitment drive and creating a new broadcast service, F1 TV, which was announced earlier this week.
In its year-end financial results for 2017, Liberty Media reported a one percent fall in F1’s total revenue to $1.784 billion, resulting in a total operating loss of $37 million for the year, as the American mass media company has taken another hit in their ownership of Formula 1 after it was revealed that grand targets set over increasing the sponsorship of the sport had come up short. Profits from sponsorship were at a 10-year low in 2017 – the American company’s first year in charge of F1.
Although Liberty Media had boasted of the “enormous opportunity” available in the sponsorship sphere, major gains are yet to be made. Speaking last year, Liberty chief executive Greg Maffei said: “There is enormous opportunity in areas like sponsorship, in the short term. There are some near-term wins around things like advertising. We have three executives involved in advertising and sponsorship, only one of whom is dedicated to that. In contrast, Major League Baseball has about 80 people involved in sponsorship. And you see the commensurate number where we have a teens kind of number of sponsors for F1 and MLB has something like 75 sponsors. Opportunity there, we think, is enormous.”
With overall revenues fluctuating, television audiences falling and the flagship introduction of the Miami Grand Prix pushed back a year, Liberty have struggled to stamp their mark on F1 since taking over from Bernie Ecclestone, although changes to the television product and social media output have been welcomed by fans. According to Forbes, F1’s sponsorship package increased by $11million in 2017 – a deal signed with champagne brand Carbon chief among them – although the loss of money from Allianz and UBS has hit them hard.
Other gains were made thanks to contracted increases in existing deals. Although sponsorship comprises the smallest part of F1’s income, Liberty’s failure to make significant progress will be used as another stick to beat the company with by its detractors.
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