Formula 1 News: F1 reports 64% increase in profit, revenue soars
Liberty Media has announced Formula 1 enjoyed revenues of more than $3.2 billion during the 2023, up $650 million. Profits increased 64%.
“2023 marked another incredible season for Formula 1,” said F1 CEO, Stefano Domenicali.
“We had strong engagement across all platforms, with record race attendance and F1 holding its position as the fastest growing league on social media for the fourth consecutive year.
“F1 saw continued fan growth especially in the US market, strengthened by the successful Las Vegas Grand Prix, and across a younger and more female audience.
“Our sustainability initiatives remain a priority for F1 and our partners, and we look forward to running all seven F1 Academy races this season alongside the F1 calendar.
“We are excited for the 2024 season as we focus on deepening our relationships with fans and optimizing our commercial partnerships to bring incremental value.”
Payments to teams came to 1.215 billion for 2023, up from $1.157 billion.
The following table provides the financial results attributed to Formula One Group for the fourth quarter and full year 2023. $16 million and $72 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to Formula One Group in the fourth quarter and full year 2023, respectively.
“2023 marked another incredible season for Formula 1. We had strong engagement across all platforms, with record race attendance and F1 holding its position as the fastest growing league on social media for the fourth consecutive year. F1 saw continued fan growth especially in the US market, strengthened by the successful Las Vegas Grand Prix, and across a younger and more female audience,” said Stefano Domenicali, Formula 1 President and CEO. “Our sustainability initiatives remain a priority for F1 and our partners, and we look forward to running all seven F1 Academy races this season alongside the F1 calendar. We are excited for the 2024 season as we focus on deepening our relationships with fans and optimizing our commercial partnerships to bring incremental value.”
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amounts in millions |
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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 |
$ |
754 |
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$ |
1,230 |
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$ |
2,573 |
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$ |
3,222 |
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Corporate and other |
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— |
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15 |
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— |
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15 |
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Intergroup elimination |
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— |
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(15 |
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— |
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(15 |
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Total Formula One Group |
$ |
754 |
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$ |
1,230 |
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$ |
2,573 |
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$ |
3,222 |
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Operating Income (Loss) |
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Formula 1 |
$ |
58 |
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$ |
153 |
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$ |
239 |
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$ |
392 |
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Corporate and other |
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(17 |
) |
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(31 |
) |
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(66 |
) |
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(95 |
) |
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Total Formula One Group |
$ |
41 |
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$ |
122 |
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$ |
173 |
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$ |
297 |
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Adjusted OIBDA (Loss) |
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Formula 1 |
$ |
147 |
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$ |
238 |
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$ |
593 |
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$ |
725 |
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Corporate and other |
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(12 |
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5 |
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(42 |
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(39 |
) |
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Total Formula One Group |
$ |
135 |
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$ |
243 |
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$ |
551 |
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$ |
686 |
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The following table provides the operating results of Formula 1 (“F1”).
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F1 Operating Results |
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2023 |
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% Change |
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2022 |
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2023 |
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% Change |
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(unaudited) |
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(unaudited) |
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amounts in USD millions |
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amounts in USD millions |
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Primary Formula 1 revenue |
$ |
568 |
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$ |
838 |
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48 |
% |
$ |
2,107 |
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$ |
2,560 |
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21 |
% |
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Other Formula 1 revenue |
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186 |
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392 |
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111 |
% |
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466 |
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|
662 |
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42 |
% |
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Total Formula 1 revenue |
$ |
754 |
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$ |
1,230 |
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63 |
% |
$ |
2,573 |
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$ |
3,222 |
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25 |
% |
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Operating expenses (excluding stock-based compensation included below): |
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Team payments |
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(319 |
) |
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(327 |
) |
(3 |
)% |
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(1,157 |
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(1,215 |
) |
(5 |
)% |
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Other cost of Formula 1 revenue |
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(208 |
) |
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(589 |
) |
(183 |
)% |
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(593 |
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(1,041 |
) |
(76 |
)% |
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Cost of Formula 1 revenue |
$ |
(527 |
) |
$ |
(916 |
) |
(74 |
)% |
$ |
(1,750 |
) |
$ |
(2,256 |
) |
(29 |
)% |
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Selling, general and administrative expenses |
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(80 |
) |
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(76 |
) |
5 |
% |
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(230 |
) |
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(241 |
) |
(5 |
)% |
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Adjusted OIBDA |
$ |
147 |
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$ |
238 |
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62 |
% |
$ |
593 |
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$ |
725 |
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22 |
% |
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Stock-based compensation |
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(1 |
) |
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(1 |
) |
— |
% |
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(3 |
) |
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(3 |
) |
— |
% |
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Depreciation and Amortization(a) |
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(88 |
) |
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(84 |
) |
5 |
% |
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(351 |
) |
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(330 |
) |
6 |
% |
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Operating income (loss) |
$ |
58 |
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$ |
153 |
|
164 |
% |
$ |
239 |
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$ |
392 |
|
64 |
% |
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Number of races in period |
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6 |
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6 |
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22 |
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22 |
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a) |
Includes amortization related to purchase accounting of $81 million and $74 million for the fourth quarters of 2022 and 2023, respectively, and $325 million and $298 million for the full years 2022 and 2023, respectively, which is excluded from calculations for purposes of team payments. |
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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. For the year ended December 31, 2023, these revenue streams comprised 29.3%, 32.2% and 18.0%, respectively, of total F1 revenue.
There were 22 and 6 races held in the full years and fourth quarters of both 2023 and 2022. In the fourth quarter of 2023, F1 directly promoted the inaugural Las Vegas Grand Prix and recognized the revenue (ticketing, sponsorship, hospitality) and cost related to the event.
Primary F1 revenue grew in the full year and fourth quarter with increases across all revenue streams. Race promotion revenue grew primarily due to ticketing revenue from the inaugural Las Vegas Grand Prix and other contractual increases in fees. Race promotion revenue in the full year and fourth quarter also benefited from the mix of races held in each period compared to the comparable periods in the prior year.
Sponsorship revenue increased due to the recognition of revenue from the Las Vegas Grand Prix, income from new sponsors and growth in revenue from existing sponsors.
Media rights revenue grew due to increased fees under new and renewed contractual agreements and continued growth in F1 TV subscription revenue.
Other F1 revenue increased in the full year and fourth quarter primarily driven by higher hospitality revenue generated from the delivery of hospitality and experiences at the Las Vegas Grand Prix as well as Paddock Club growth at other events, with full year growth partially offset by lower freight income driven by the easing of freight cost inflation on billing rates.
Operating income and adjusted OIBDA(2) grew in the full year and fourth quarter. Team payments increased in the full year and fourth quarter driven by the growth in F1 revenue and the associated impact on the calculation of the team payments, which are 100% variable under the 2021 Concorde Agreement. Team payments as a percent of pre-team payment adjusted OIBDA decreased from 66% in 2022 to 63% in 2023 reflecting growth in adjusted OIBDA and an associated reduction on the payout percentage under the terms of the 2021 Concorde Agreement.
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 in the full year and fourth quarter primarily driven by the costs of promoting, organizing and delivering the Las Vegas Grand Prix as well as higher hospitality costs at other events associated with increased Paddock Club attendance and cost inflation, partially offset by significantly lower freight costs.
Other cost of F1 revenue also increased in both periods due to higher commissions and partner servicing costs associated with growth in Primary F1 revenue streams and higher travel costs.
Selling, general and administrative expense increased for the full year due to higher personnel, IT and marketing costs as well as costs associated with planning and running the Las Vegas Grand Prix, partially offset by lower legal and professional fees and foreign exchange favorability. Selling, general and administrative expense decreased in the fourth quarter as higher personnel costs were offset primarily by foreign exchange favorability.
The businesses and assets attributed to Formula One Group during the fourth quarter of 2023 consisted of Liberty Media’s subsidiary F1 and other minority investments, and as of January 3, 2024, consist primarily of Liberty Media’s subsidiaries F1 and Quint, and other minority investments.