Formula One sees increased loss in operating income for 2018

Formula One recorded an increased loss in its operating income for 2018 despite a rise in revenue and a further reduction in payments to the teams.

Liberty Media has released its annual report for its portfolio of assets that includes F1, which it purchased outright in January 2017.

Overall revenue rose by $44 million (£33m) from $1,783 million in 2017 to $1,827 million, although only a negligible amount of just $4 million was derived from what it describes as its “primary F1 revenue” – race promotion fees, broadcasting fees, and advertising and sponsorship fees.

The bulk of the increase – £39 million – came from what is described as “other Formula 1 revenue”, determined in a statement as being “primarily due to higher logistics revenue, higher digital media and TV production-related revenue, increased revenue from various fan engagement activities and higher spare part sales for the F2 and GP3 support series”.

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However, there was an 84 per cent hike in losses on its operating income, from $37 million in 2017 to $68 million last year. Across the same period team payments fell by $6 million from $919 million to $913 million.

Assessing the overall picture, F1 chairman and CEO Chase Carey said: “We have made significant investments in the business over the last two years which are showing results through increased fan engagement across race attendance and all media platforms. This provides tremendous momentum as we enter 2019.”

Liberty has declared its primary F1 revenue as “essentially flat”, with a modest increase in race promotion revenue offset by a decrease in advertising and sponsorship revenue.

European races

It claims that “race promotion revenue in 2018 was impacted by the calendar variance, with the non-occurrence of the Malaysian Grand Prix in 2018 not fully offset by the return of two European races in France and Germany”.

Positively, Liberty noted that 2018 audience figures increased across TV and digital platforms for the second year in a row, with TV viewers across all F1 programming up 10 per cent to 490 million.

The aggregate attendance at races grew 8 per cent to 4.1 million in 2018, with the average attendance per race weekend increasing by 2.7 per cent to approximately 195,000.

F1 further claims itself to be the “fastest growing major sports brand on social media for the second straight year, with social media followers up 54 per cent to 18.5 million”.

Greg Maffei, Liberty Media president and CEO, said: “F1 concluded an exciting 2018 season and increased fans at the races, TV viewership and social media engagement.”