F1 enjoys another revenue bump as recovery continues

Formula 1

F1 enjoys another revenue bump as recovery continues

Third-quarter results show increased improvement

Ian Parkes

Friday 4 November 2022 15:17

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Formula 1 has enjoyed another significant bump in revenue as the sport continues its ongoing recovery following the lean years of the Covid-19 period.

Owners Liberty Media has reported a $47million increase in total F1 revenue for the third quarter of this year, standing at $715m compared to $668m for the same period in 2021, with both staging seven races.

In comparison to 2021, the figure is not as high as in the previous two quarters of this year as midway through last year, F1 started to return to normality with fans attending events and the Paddock Club restarting.

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Explaining the figures, a Liberty Media report on F1 stated: "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."

That is with specific reference to the fact F1 staged the lucrative Russian Grand Prix in 2021. The French GP was effectively its replacement in the same quarter this year.

The statement added: “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.”

Overall, there were increases in operating expenses, with team payments rising from $338m to $370m, with other unattributed costs increasing from $111m to $124m.

F1 also reported a slight increase in operating income, up $2m from $80m to $82m

Explaining the rise in costs, F1's statement added: “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.”