Liberty Media has announced Formula 1’s revenues dropped 84% during the first quarter of 2020 as a result of the COVID-19 pandemic.
Across January, February and March of 2019, F1 generated revenues of $246 million and hosted two grands prix in that time. However, with no racing yet possible this year, Liberty’s accounts for the same period for this year show F1’s revenues dropped to just $39m. The drop was even bigger for primary F1 revenue — “comprised of (i) race promotion fees, (ii) broadcasting fees and (iii) advertising and sponsorship fees” — as that dropped 93% from $198m to $13m.
“Since there were no events held during the first quarter of 2020, primary F1 revenue consisted only of the elements of sponsorship contracts associated with non-race related rights that were recognized during the period, and no race promotion fees nor broadcasting fees were recognized,” Liberty Media’s results read.
“Similarly, other F1 revenue decreased due to zero revenue recognized from the Paddock Club and other event-based activities and television production activities. We currently expect no races to take place in the second quarter of 2020.”
Having made $96m in team payments during the first quarter of 2019, none were made this year “since such payments are recognized on a pro-rata basis across races on the calendar.” With much lower costs during the first quarter, the overall deficit in operating income grew from $47m to $137m.
As a company, F1 placed around 50% of its staff on furlough in response to the COVID-19 situation, with the United Kingdom — where the sport is headquartered — in lockdown since March 23. Staff changes were only implemented in early April, meaning they did not have an impact on the first quarter results but will do so in Q2.
Liberty Media also completed the reattribution of certain assets and liabilities between the Liberty SiriusXM Group and the Formula One Group in late April, leading to the Formula One Group receiving a net cash payment of $1.4 billion to help it ride out the crisis. As a result of the timing, the reattribution will only be reflected in Liberty’s second quarter results.