Rising costs, falling revenues: Liberty Media's financials a problem for F1 teams

Monday, 13 november 2017, 19:13

Liberty Media's latest financial results will have made for concerned reading for F1 teams as they look to plan for next season. 

Liberty purchased a 100% share in Formula 1's parent company, Delta Topco, in January, for $4.6Bn, buying out a consortium of sellers in order to complete the purchase, some of which was offered in shares.

Interestingly, those shareholders represented 64.7% of the new company, Formula 1 Group, but in the nine months January-September 2017, Liberty disclosed that only 3% of those shareholders currently retain their stake.

But what will concern team owners most will be the additional incurred costs by Liberty which are being set against their underlying profit. 

Teams split 68% of F1's profits between them, meaning that the higher the costs go, the lower the profit margin. Liberty revealed on Thursday that the revenue generated for the nine months to September 2017 was $650m, a $41m drop over the same period last year. That meand $41m of revenue not going to the teams that was at this point last year.

Liberty explained away the drop, citing the lack of German Grand Prix (which was on hiatus) in the calendar this year, as well as 'higher personnel costs as a result of additional headcount due to the acquisition by Liberty of Formula 1.”

However, these additional costs make up an eye-watering 19%, or $88m, increase, eating into what the teams take home. 

Liberty has also increased the debt on its books to an astonishing £3.3Bn and the result of all of this is an overall loss of $160m for the year to date - little wonder why some investors chose to sell up.

What will concern the teams most, however,  is a fact that F1 legend Niki Lauda alluded to in comments on Sunday - that some of the profit drop could have been offset by Liberty attracting new sponsors to the sport; something that they have struggled to do since the acquisition.

Lauda's scathing words, coupled with controversial new engine regulations, means it is a delicate time for fans and teams alike, something that fans should be aware of going into the 2018 season. 

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Comments (10)

  • Michael Webb-Hilton
    In season testing. Less expense. More engine manufacturers. More cars. No hybrid bullshit. Refuelling. Single lap qualifier styled format because who the hell watches Q1! Scrap these nonsense driver penalties for constructor problems. Scrap halos, bring back tracks with grass verges. Provide points for fastest laps and pole positions. Revamp tracks that are worth it and sack off crap tracks like Monaco. Bring back a points system that makes sense. Promote more horsepower and less aero. Have commentators that are not afraid to tell it how it is without having to tow the party line (channel 4 your coverage is crap). Ban Eddie Jordan from ever commenting.... then maybe people might watch with fire inside their hearts
  • William S. Gatlos Jr
    I'm sorry but the only thing exciting about Formula 1 racing is the qualifying. One guy 30 seconds out in front with no chance of anyone overtaking him is really shity racing. I went to two Formula One races in Phoenix Arizona back in 89 and 90 and it was the most fabulous spectacular thing that I've ever been to In My Life The spectacle was great the people were great the women were beautiful but the racing sucked
  • Ian Miles
    The first or many political shots to be fired in changing the income distribution rules. As long as Liberty Media don’t turn it into Nascar, an extended Taylor Swift concert and leave Ross Brawn to get on with his job, it should all turn out fine.
  • Mike Hanson
    ROFLMAO they lost less than ONE teams cost for poser units in a season, 200 million pounds! suck it up Chase, oh and drop the US GP show, if I want Wrestling I will watch it....... BTW what are the solid white lines for on the edge of the track?
  • Bryan Roebuck
    Want to fix the spot? Bring back in season testing and development so that one team does not dominate the entire field for 4 years because they got lucky with their engine design.
  • Robert DeCastro
    We can make fun about Indy and NASCAR racing...there were 10 different drivers won out 17 races in Indy. And several drivers on NASCAR. F1 had 5 in counting with 1 race to go.
  • Robert DeCastro
    Enough with the v6 high tech Bullshit. Bring back the v8 v10 v12 raw power..MAKE IT LOUD AGAIN!
  • Vincenzo Mascia
    Lol what a joke lol Yet they give Bieber 45 million a year lol
  • Adam Glass
    DRS anywhere on the track

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