F1 News: Liberty Media reports record Q2 for Formula 1

The addition of two grand prix events helped Formula 1 to an all-time high in revenue during a second quarter, the company said in an earnings report.

F1 parent company Liberty Media reported on Thursday the racing series had $871 million in revenue in Q2, its best for an April-June earnings period and up 20% from the same time last year, when the motor racing company brought in $724 million. The sizable jump can be attributed to F1 increasing the number of events from six to eight during those three months.

The Chinese Grand Prix in April and the Emilia-Romagna Grand Prix in May were both back this year after being canceled in 2023, contributing to the increase in second quarter primary revenue, which includes media rights and sponsorship fees.

With the additional races, however, team payments jumped 26% in the quarter, from $344 million to $435 million.

F1, which reported 3.7 million race attendees through the first half of the season, touted the growth of the circuit during the investor call on Thursday. CEO Stefano Domenicali says F1’s social media followers are up more than 30% across all platforms.

“Demand for our sport continues to be huge,” Domenicali said.

Liberty Media announced that it plans to close on the acquisition of bike racing championship Moto GP by year’s end. The Colorado-based company also announced it has expanded its relationship with Las Vegas Convention and Visitors Authority. The official partnership deal with the local marketing organization comes after the two teamed up to deliver the inaugural Las Vegas Grand Prix last November. This year’s event takes place Nov. 23.

FORMULA ONE GROUP – The following table provides the financial results attributed to Formula One Group for the second quarter of 2024. In the second quarter, Formula One Group incurred $14 million of corporate level selling, general and administrative expense (including stock-based compensation expense).

F1 Operating Results

“The F1 season is seeing phenomenal racing, with seven different winners through fourteen races and tighter gaps across the grid. Social media followers are up over 30% across F1 platforms and we had 3.7 million race attendees through the first half of the season with ten sellout crowds,” said Stefano Domenicali, Formula 1 President and CEO. “F1 Academy is off to a strong start in its first season running all events alongside F1 race weekends. Together with the Sprint and FIA F2 and F3, it is adding to the exciting on-track action and bringing added value to our fans, promoters and sponsors.”

The following table provides the operating results of Formula 1 (“F1”).

Primary F1 revenue represents the majority of F1’s revenue and is derived from (i) race promotion revenue, (ii) media rights fees and (iii) sponsorship fees.

There were eight races held in the second quarter of 2024, compared to six races held in the second quarter of 2023. There are 24 events scheduled for the 2024 race calendar, compared to 22 events held in 2023.

Primary F1 revenue increased in the second quarter with growth across media rights and sponsorship partly driven by two more races held in the current period, which resulted in a greater proportion of season-based revenue recognized, as well as contractual increases in fees. Media rights revenue also benefited from continued growth in F1 TV subscription revenue. Sponsorship revenue also increased due to the impact of the mix of races on event specific fees and recognition of revenue from new sponsors. Race promotion revenue was relatively flat in the second quarter as fees from the additional races were offset by the different mix of events compared to the prior year period. Other F1 revenue increased in the second quarter primarily due to higher hospitality, freight, travel, technical services and F2 and F3 income driven by the additional races held in the current period.

Operating income and Adjusted OIBDA increased in the second quarter. Team payments increased due to the pro rata recognition of payments across the race season with two more races held in the current period and the expectation of higher team payments for the full year. 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 increased due to higher commissions and partner servicing costs associated with growth in Primary F1 revenue streams as well as higher hospitality, FIA regulatory, digital, technical and travel costs from the additional races held in the current period. Other cost of F1 revenue in the second quarter was also impacted by higher costs associated with F1 Academy and lease expense for the Las Vegas Grand Prix Plaza which wasn’t incurred in the prior year. Selling, general and administrative expense increased due to higher personnel, IT and property costs as well as legal and other professional fees, partially offset by lower marketing costs, foreign exchange favorability and bad debt recoveries.