F1: Liberty Media reports first Qtr 2023 financial results
–Press Release–
Liberty Media Corporation today reported first quarter 2023 results covering the period from January to March.
- Attributed to Formula One Group
- Announced multiple updates to sponsorship agreements, including extending MSC Cruises as Global Partner, welcoming Puma as Official Provider of F1’s sporting apparel and naming Paramount+ and Liqui Moly as Official Partners
- Extended agreement with ESPN to broadcast F1 in Latin America and Caribbean through 2025
- Las Vegas Grand Prix Paddock Building construction at 60% completion with expected occupancy by end of September
- Formula 1 leverage at quarter-end of 2.2x will trigger permanent reduction in existing Term Loan B margin from 3.25% to 3.00%
- Formula One Group paid $202 million in exchange for the cancellation of 3.1 million notional FWONA shares underlying intergroup interest held at Liberty SiriusXM Group corresponding to the portion of 1.375% cash convertible notes repurchased
Greg Maffei, Liberty Media President and CEO said, he Formula 1 season is underway and fans are tuning in across platforms. Arrangements for the Las Vegas Grand Prix are ramping up, with the Paddock Building construction and track preparations progressing on-time and in-line with our capex expectations.
In the first quarter, the Formula One Group incurred approximately $16 million of corporate level selling, general and administrative expense (including stock-based compensation expense).
“The F1 season is off to a fantastic start, with thrilling races to-date and many more to come on our record 23-race 2023 calendar. The race weekends are drawing huge crowds, with the Australian Grand Prix hosting 445,000 fans and sellouts for the majority of the remaining calendar,” said Stefano Domenicali, Formula 1 President and CEO. “The power of our platform continues to draw interest also from commercial partners, with a number of new and expanded sponsors already announced season-to-date.”
Overall revenue was slightly up from the same period last year with a 6% rise from $360m to $381m, while operating income was up 3% from $35m to $36m, with the flat progress partly explained by $6m in costs attributed to planning for the Las Vegas GP.
Primary F1 revenue increased in the first quarter with growth across media rights, race promotion and sponsorship. Media rights revenue increased due to continued growth in F1 TV subscription revenue and increased fees under new and renewed contractual agreements.
Race promotion revenue grew due to contractual increases in fees, and sponsorship revenue increased due to the recognition of revenue from new sponsors and growth in revenue from existing sponsors.
Other F1 revenue decreased in the first quarter primarily due to lower freight income driven by the easing of freight cost inflation on billing rates, partially offset by increased hospitality revenue from higher Paddock Club attendance.
Operating income was relatively flat and adjusted OIBDA decreased in the first quarter. Team payments were higher compared to the prior year due to the pro rata recognition of increased payments across the race season.
Other cost of F1 revenue is largely variable in nature and is mostly derived from servicing both Primary and Other F1 revenue opportunities. These costs were relatively flat, as significantly lower freight costs were largely offset by increased Paddock Club costs associated with servicing higher hospitality attendance at the two events held in the first quarter, and higher commissions and partner servicing costs associated with increased Primary F1 revenue streams, including F1 TV subscriptions.
Selling, general and administrative expense increased in the first quarter due to higher personnel, IT and marketing costs.
There were approximately $6 million of costs associated with the planning of the Las Vegas Grand Prix included in selling, general and administrative expense in the first quarter of 2023.
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1Q22 |
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1Q23 |
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amounts in millions |
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Formula One Group |
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|
|
|
|
|
||
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Revenue |
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|
|
|
|
|
||
|
Formula 1 |
|
$ |
360 |
|
|
$ |
381 |
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Total Formula One Group |
|
$ |
360 |
|
|
$ |
381 |
|
|
Operating Income (Loss) |
|
|
|
|
|
|
||
|
Formula 1 |
|
$ |
34 |
|
|
$ |
35 |
|
|
Corporate and other |
|
|
(15 |
) |
|
|
(19 |
) |
|
Total Formula One Group |
|
$ |
19 |
|
|
$ |
16 |
|
|
Adjusted OIBDA (Loss) |
|
|
|
|
|
|
||
|
Formula 1 |
|
$ |
122 |
|
|
$ |
117 |
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|
Corporate and other |
|
|
(10 |
) |
|
|
(12 |
) |
|
Total Formula One Group |
|
$ |
112 |
|
|
$ |
105 |
|
The following table provides the operating results of Formula 1 (“F1”).
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F1 Operating Results |
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|
1Q22 |
|
1Q23 |
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% Change |
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amounts in millions |
|
|
||||||||
|
Primary Formula 1 revenue |
$ |
287 |
|
$ |
314 |
|
9 |
% |
|||
|
Other Formula 1 revenue |
|
73 |
|
|
67 |
|
(8 |
)% |
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Total Formula 1 revenue |
$ |
360 |
|
$ |
381 |
|
6 |
% |
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Operating expenses (excluding stock-based compensation): |
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|
|
|
|
||||||
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Team payments |
|
(100 |
) |
|
(112 |
) |
(12 |
)% |
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|
Other cost of Formula 1 revenue |
|
(95 |
) |
|
(94 |
) |
1 |
% |
|||
|
Cost of Formula 1 revenue |
$ |
(195 |
) |
$ |
(206 |
) |
(6 |
)% |
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|
Selling, general and administrative expenses |
|
(43 |
) |
|
(58 |
) |
(35 |
)% |
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|
Adjusted OIBDA |
$ |
122 |
|
$ |
117 |
|
(4 |
)% |
|||
|
Depreciation and Amortization(a) |
|
(88 |
) |
|
(82 |
) |
7 |
% |
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|
Operating income (loss) |
$ |
34 |
|
$ |
35 |
|
3 |
% |
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|
|
|
|
|
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Number of races in period |
|
2 |
|
|
2 |
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| ____________________ | ||
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a) |
Includes $81 million and $74 million of amortization related to purchase accounting as of March 31, 2022 and March 31, 2023, respectively, that is excluded from calculations for purposes of team payments. |
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