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CVC suffers $200M headache with money-losing F1
Formula 1's corporate hospitality operation Beta Holdings saw pre-tax losses grow to $5.2 million, according to accounts for 2010.

Despite the addition of new races in Canada and South Korea, revenues stalled as sponsors cut spending on corporate hospitality. F1 is majority owned by private equity firm CVC and the accounts reveal that it has racked up a combined $200 million loss since it was acquired in 2006.

Beta Holdings' turnover last year nudged up by just $3.2 million to $153.5 million, but this was not enough to compensate for a 3.3 per cent rise in costs.

The increase in the number of races boosted the overheads, which include transporting 40,000 glasses, 30,000 plates, 10,000 cut flowers, 5,500 magnums of champagne and 200 tons of tents to each event.
About 4,000 people are served in F1's hospitality area at every race and last year prices ranged up to $4,520 per person for a three-day ticket. Beta Holdings financial director Duncan Llowarch said: 'The prevailing economic conditions created a difficult environment for hospitality sales.'

In an attempt to drive revenue, ticket prices have been increased by as much as 12 per cent in 2011. CVC used a $285 million loan from Royal Bank of Scotland to buy the business and the debt incurs interest of Libor – the rate at which banks lend to each other – plus between one per cent and 3.5 per cent.

A fall in the interbank rate meant that Beta Holdings' interest payments dropped by $2 million to $5.4 million last year and it paid off $16.2 million of the total loan leaving $182.8 million outstanding. Meanwhile, F1 chief executive Bernie Ecclestone has warned that last month's earthquake in Japan could affect the Grand Prix due to be held there in October.

The Suzuka track 500 miles south-west of the epicenter has not been damaged, but there are fears that ticket sales could be jeopardized as a result of the disaster.

Last year 100,000 spectators attended the race and ticket sales are crucial since they cover the annual race hosting fee estimated at $48.4 million by Formula 1 trade guide Formula Money.

An estimated $40 million in revenue has already been lost this year due to the cancellation of the Bahrain Grand Prix as a result of the civil uprising in the Gulf state.  Daily Mail

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