Formula 1 Quarter 2 financial report


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Formula One Group revenue has registered a six percent growth in the 2019 Quarter 2 over the corresponding period in the last fiscal. Liberty Media Corporation has revealed that the Formula One Group revenue reached $ 620 million for the second quarter ending June 30, up from $ 585 million last year.

In the second quarter, the Formula One Group has incurred approximately $10 million of corporate level selling, general and administrative expense (including stock-based compensation expense), Liberty media has stated in a Press release.

The primary Formula 1 revenue is up by 8% during the period – from $ 491 million to $ 531 million. However, a decline in the other Formula 1 revenue – from $ 94 million in Q2 2018 to $ 89 million this year – has restricted overall growth for the quarter to 6%.

Primary F1 revenue consists of race promotion fees, broadcasting fees and advertising and sponsorship fees.

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F1 operating income has increased for the April-June quarter, from $14m to $26m, while the teams’ slice of the pie was hiked from $307 million to $335 million.

The quarter revenue calculation for both the years is based upon the income of seven races.

“Formula 1 heads into our summer break on the heels of some unforgettable races. We’re excited by the growing competitiveness of Red Bull and Ferrari and the return of Honda as a winning engine supplier,” Formula 1 Chairman and CEO Chase Carey has said in a statement.

Carey has also announced that Formula One next year will feature all ten teams in Netflix Series next year. “We were thrilled to announce that season two of the Netflix Series: ‘Formula 1: Drive to Survive’ will air in 2020 and will feature all ten teams. We are pleased with our growth in revenue and profitability and on target to hit our goals for 2019,” said Carey.

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Race promotion revenue has decreased due to the differing fees associated with specific races held in the second quarter of 2019 compared to 2018, partially offset by rate increases in the underlying contracts. Broadcast revenue increased primarily due to contractual rate increases. Advertising and sponsorship revenue increased due to revenue from new sponsorship agreements entered into beginning in the second half of 2018. Other F1 revenue decreased in the second quarter primarily due to the mix of races, which resulted in lower TV production and Paddock Club revenue.

Operating income and adjusted OIBDA(2) has increased in the second quarter as revenue growth more than offset elevated costs. Cost of F1 revenue increased primarily due to higher team payments driven by our improved performance and the pro-rata recognition of such payments across the race season. Selling, general and administrative expense decreased modestly primarily driven by the impact of foreign exchange rate fluctuations, states the Press release.

The race calendar variances between 2018 and 2019 have resulted in income from 22 races falling in the trailing twelve months measured for F1’s covenant calculations as of June 30, 2019.

The businesses and assets attributed to the Formula One Group consist of Liberty Media’s subsidiary F1, its interest in Live Nation, minority equity investments and an intergroup interest in the Braves Group. There are approximately 9.1 million notional shares of the Braves Group underlying the Formula One Group’s 15.1% intergroup interest as of July 31, 2019.

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