Liberty Media has posted an increased earning in F1’s revenue in the third quarter of 2018 from that in 2017.

There is a massive surge in the percentage of income in the third quarter of F1’s revenue in 2018 which stands at 29% from that of 2017 for the period between July and September – the total revenue increasing from $501 to $647 million.

The primary source of F1 income grew from $430 to $560 million while the other source sees an increase from $71 to $87 million. The F1 teams payments saw an increase of 26% from $273 to $344 million.

Taking into consideration all the other costs involved, the operating income showed a massive 490% increase from a negative $10 million to a positive $39 million. The jump was predominantly due to two more races than 2017 in the same period.

Last year, there were six races in the three months while this year there were eight races which included a triple-header. The Liberty Media also adopted a ‘new revenue recognition accounting standard (ASC 606)’ which helped in the increased income.

The increased number of races helped in other revenues as well relating to broadcast, logistics and more. Liberty Media also noted that the income was raised due to increase sale of spare parts in Formula 2 and GP3 Series.

F1’s boss Chase Carey said: “Lewis Hamilton secured his 5th World Championship in Mexico City after a competitive 2018 season, and we expect continued action at our final two races in Brazil and Abu Dhabi.

“Formula 1 hosted our first U.S.-based fan festival in Miami and attracted an estimated 80,000 spectators for a live car run down Biscayne Boulevard, and excitement around the sport grows with the announcement that Hanoi will host a race from 2020.

“Our F1 New BalanceEsports Pro Series got underway in October and has attracted over 13 million views on social media across all events this year.” Full statement regarding F1’s accounts by Liberty Media:

“Primary F1 revenue is comprised of (i) race promotion fees, (ii) broadcasting fees and (iii) advertising and sponsorship fees. Results in the third quarter of 2018 were favorably impacted by the timing of the 2018 race calendar, with 2 additional races taking place in the third quarter of 2018 compared to the third quarter of 2017.

“Race promotion revenue increased primarily due to the two additional races held in the third quarter of 2018, as well as contractual increases in race promotion fees. Broadcast revenue increased due to the higher proportionate recognition of season-based income during the quarter (8/21races took place in the third quarter of 2018 compared to 6/20races in the third quarter of 2017) as well as favorable foreign currency movements.

“Advertising and sponsorship revenue increased due to the two additional races in the third quarter of 2018 and revenue from new sponsorship agreements, partially offset by the impact of the adoption of the new revenue recognition accounting standard (ASC 606) on recognizing fees from F1’s Global Partner and Official Supplier contracts.

“These fee elements were previously recognized pro-rata with the race calendar, but certain elements are now being recognized evenly over the calendar year and others over a smaller number of specific events. This change provided a modest headwind to reported advertising and sponsorship revenue in the third quarter of 2018 but will be neutral on a full calendar year basis.

“Other F1 revenue increased in the third quarter primarily due to higher logistical and travel services revenue, higher digital media and TV production related revenue, increased revenue from various fan engagement activities and higher spare part sales for the F2 and GP3 support series.

“Operating income and adjusted OIBDA increased in the third quarter as revenue growth driven by the additional races more than offset elevated costs. Cost of F1 revenue increased primarily due to higher team payments driven by the pro rata recognition of such payments across the race season, as well as increased costs associated with providing component parts to F2 and GP3 teams, fan engagement activities, freight, technical activities and digital media.

“Selling, general and administrative expense increased primarily as a result of increased marketing and research costs. F1’s total net debt to covenant OIBDA ratio, as defined in F1’s credit facilities for covenant calculations, was approximately 6.5x as of September 30, 2018, as compared to a maximum allowable leverage ratio of 8.75x.

“The race calendar variances between 2017 and 2018 resulted in income from 22 races falling in the trailing twelve months measured for F1’s covenant calculations as of September 30, 2018. Income from only 21 races will be captured in the trailing twelve months to be measured at year-end, and we expect the reported leverage ratio will increase accordingly.

“The businesses and assets attributed to the Formula One Group consist of Liberty Media’s subsidiary F1, its interest in Live Nation, minority equity investments and an intergroup interest in the Braves Group. There are approximately 9.1 million notional shares of the Braves Group underlying the Formula One Group’s 15.1% intergroup interest as of October 31, 2018.”

[Read Also: Liberty Media’s Q2 posting]