Formula 1 News: Liberty Media to adjust F1 Management
After it was announced that Liberty Media CEO Greg Maffei would be resigning at the end of the year, Chairman John Malone will fill the role on an interim basis with an eye toward a realignment of management.
Related Article: The man out to get Andretti, Greg Maffei, leaving Liberty Media
On the Liberty Media Q3 investor conference call, Malone revealed he’ll look to make changes at Liberty level with a view towards improving the Formula 1 business.
“We will probably realign our board of directors a bit to focus on two things,” Malone said of his plans post-Maffei.
“One is strengthening our ability to support the management on Formula 1 and the growth of our involvement in the racing businesses.
“And number two, in looking at opportunities to put together a jigsaw puzzle that will be the future to Liberty Media made up of whatever diversified assets we think will represent great, long-term investments for our shareholders.”
Maffei led Liberty Media’s acquisition of Formula 1 in January 2017 in a deal worth, at the time $8 billion.
Reflecting on Maffei’s time with the organisation, Malone highlighted the F1 deal as “the most exciting” of his 19-year tenure as CEO.
“The most interesting transaction and most creative, I think, that the Liberty Media team and Greg came up with was how to take control of Formula 1, make it a public company, give the private equity investors liquidity, and end up creating one of the greatest success stories, I think, in sports,” he said.
“The use of a tracking stock to back Formula 1 into being published, bringing Chase Carey in, an extremely well-respected sports management personality who had run DirectTV for us, for Rupert [Murdoch] and then for us.
“That he and Greg have built this wonderful Formula 1 which is incredibly successful, but that has been probably the most noteworthy single business that Liberty has ever been involved in.
“So, we’re particularly proud of that.”
Q3 Earnings
FORMULA ONE GROUP – The following table provides the financial results attributed to Formula One Group for the third quarter of 2024. In the third quarter, Formula One Group incurred $21 million of corporate level selling, general and administrative expense (including stock-based compensation expense).
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3Q23 |
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3Q24 |
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amounts in millions |
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Formula One Group |
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Revenue |
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Formula 1 |
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$ |
887 |
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$ |
861 |
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Corporate and other |
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— |
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70 |
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Intergroup elimination |
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— |
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(20 |
) |
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Total Formula One Group |
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$ |
887 |
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$ |
911 |
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Operating Income (Loss) |
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Formula 1 |
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$ |
132 |
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$ |
146 |
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Corporate and other |
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(25 |
) |
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(36 |
) |
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Total Formula One Group |
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$ |
107 |
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$ |
110 |
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Adjusted OIBDA (Loss) |
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Formula 1 |
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$ |
215 |
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$ |
221 |
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Corporate and other |
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(18 |
) |
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(14 |
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Total Formula One Group |
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$ |
197 |
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$ |
207 |
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F1 Operating Results
“Our business is benefitting from excellent competitive and financial momentum. We signed a ground-breaking partnership with LVMH for 2025, expanded our relationships with Lenovo and American Express, and secured licensing agreements with LEGO and Mattel’s Hot Wheels which expand F1 beyond our race calendar into the homes of our fans,” said Stefano Domenicali, Formula 1 President and CEO. “The thrilling racing and tight championship has benefitted viewership and digital engagement as the season has progressed. Race attendance is up season-to-date at 5.8 million with sellout crowds at nearly all races. It is great to see the on-track talent of both our seasoned drivers as well as young talent who hopefully have long F1 careers ahead.”
The following table provides the operating results of Formula 1 (“F1”).
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3Q23 |
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3Q24 |
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% Change |
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amounts in millions |
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Primary Formula 1 revenue |
$ |
790 |
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$ |
758 |
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(4 |
)% |
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Other Formula 1 revenue |
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97 |
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103 |
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6 |
% |
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Total Formula 1 revenue |
$ |
887 |
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$ |
861 |
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(3 |
)% |
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Operating expenses (excluding stock-based compensation): |
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Team payments |
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(432 |
) |
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(371 |
) |
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14 |
% |
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Other cost of Formula 1 revenue |
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(183 |
) |
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(190 |
) |
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(4 |
)% |
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Cost of Formula 1 revenue |
$ |
(615 |
) |
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$ |
(561 |
) |
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9 |
% |
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Selling, general and administrative expenses |
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(57 |
) |
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(79 |
) |
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(39 |
)% |
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Adjusted OIBDA |
$ |
215 |
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$ |
221 |
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3 |
% |
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Stock-based compensation |
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(1 |
) |
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(1 |
) |
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— |
% |
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Depreciation and Amortization(a) |
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(82 |
) |
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(74 |
) |
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10 |
% |
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Operating income (loss) |
$ |
132 |
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$ |
146 |
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11 |
% |
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Number of races in period |
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8 |
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7 |
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_________________________ |
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a) |
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Includes $74 million and $61 million of amortization related to purchase accounting for the periods ended September 30, 2023 and September 30, 2024, respectively, that is excluded from calculations for purposes of team payments. |
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 seven races held in the third quarter of 2024, compared to eight races held in the third quarter of 2023. There are 24 events scheduled for the 2024 race calendar, compared to 22 events held in 2023.
Primary F1 revenue decreased in the third quarter due to less media rights and sponsorship revenue driven by one fewer race held in the current period which resulted in a lower proportion of season-based revenue recognized. Sponsorship revenue also decreased due to the impact of the mix of races on event specific fees, partially offset by recognition of revenue from new sponsors. The decline in media rights revenue recognized was partially offset by contractual increases in fees and continued growth in F1 TV subscription revenue. Race promotion revenue grew in the third quarter due to fees from the different mix of events held compared to the prior year period. Other F1 revenue increased in the third quarter primarily due to higher licensing revenue and revenue generated from third-party events at the Las Vegas Grand Prix Plaza, partially offset by lower hospitality income due to the mix of events in the current period.
Operating income and Adjusted OIBDA(2) increased in the third quarter. Team payments decreased due to the pro rata recognition of payments across the race season with one fewer race held in the current period, partially offset by 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 servicing Primary F1 revenue streams and higher digital costs, partially offset by lower FIA regulatory, technical, hospitality and travel costs due to the mix of events held. Other cost of F1 revenue in the third 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, property and marketing costs as well as legal and other professional fees, partially offset by foreign exchange favorability.
Corporate and Other Operating Results
Corporate and Other revenue increased in the second quarter due to the inclusion of Quint results and $7 million of rental income related to the Las Vegas Grand Prix Plaza. In the third quarter, Quint results were primarily driven by F1 Experiences across the seven races held. Quint’s revenue is seasonal around its largest events, which are generally during the second and fourth quarters. Corporate and Other Adjusted OIBDA for the third quarter of 2024 includes the rental income related to the Las Vegas Grand Prix Plaza, Quint results and other corporate overhead.
The businesses and assets attributed to Formula One Group consist primarily of Liberty Media’s subsidiaries, F1 and Quint.