Liberty Media has posted its Quarter 1 financial details for F1 2020 as COVID-19 pandemic hurts its number with no races held.
Liberty Media posted an increased revenue overall at the end of the last financial year but it has started on the wrong foot in 2020 as Q1 showcases the fall in income, especially due to the COVID-19 pandemic. It shows the extent of monetary damage.
Looking at the numbers of Q1 from 2019 and 2020 as per Liberty Media, the difference is stark, with no races held and a last-minute cancellation of Australian GP. The total revenue is positive at $39 million but at the same time, last year, it was $423 million.
The primary revenue accumulated $13 million, while the other revenue stood at $26 million to make it $39. Reports suggested that F1 teams were paid in full in advance but since that details comes under pro-rata basis, so the column showed zero for Q1.
The operating income showed a massive loss of $137 million, whereas last year, it stood at $47 million – also in loss. The adjusted OIBDA stood at $42 million in loss for F1 2020 Q1 from a positive $59 million at the same time last year as per Liberty Media.
The full statement from Liberty Media explained the Q1 results:
“Primary F1 revenue is comprised of (i) race promotion fees, (ii) broadcasting fees and (iii) advertising and sponsorship fees. Due to the outbreak of COVID-19, there were no F1 races held in the first quarter of 2020. F1 currently expects racing to commence in July and continue through December with a target calendar of 15 to 18 races. It is currently unknown at what point fans will be permitted to attend.
“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. 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. Operating loss increased and Adjusted OIBDA decreased in the first quarter. There was no team payment expense recorded since such payments are recognized on a pro-rata basis across races on the calendar. Other cost of F1 revenue is largely variable in nature and relates directly to revenue opportunities. These costs decreased primarily due to no races taking place and the deferral of non-critical expenses.
“Certain costs were incurred during the first quarter in anticipation of the start of the 2020 race season, including freight, travel and technical costs relating to the Australian Grand Prix, which was cancelled on the eve of the event. Selling, general and administrative decreased due to lower expenditures for discretionary items such as marketing and lower personnel costs, partially offset by the effects of foreign exchange related losses.
“F1 implemented certain cost cutting measures, including salary reductions and UK government-supported furloughs affecting approximately 50% of its employee base, effective April 3, 2020, which did not impact first quarter results but will impact the second quarter.”
Speaking about the current pandemic and the financial picture, F1 boss Chase Carey stated: “We are thankful to the FIA, teams, promoters, our employees and other key partners for their support and efforts during this challenging time.
“We are moving forward with our 2020 plans, while working to strengthen the long term future of F1 through new technical, sporting and financial regs that will further improve the competition and action on the track and make it a healthier business for all involved.”
As things stand, the aim for F1 is to re-start in July with back-to-back races in Austria, followed by United Kingdom. It remains unclear still as it all depends on the Governments. On financial side, the reattribution by Liberty Media will help in keeping the cash flow.
Here’s F1 teams getting a letter on revised guidelines
Here’s details from Q4 and the whole 12 months from last year
Here’s what Ross Brawn said regarding budget cap and 2020 plans
Here’s what Bernie Ecclestone stated on various topics
Here’s latest on what F1 is planning for 2020
Here’s Liberty Media on reattribution
