Formula 1 has reported a $104 million loss for the third quarter (July to September), but says income is beginning to recover from the impact of the coronavirus pandemic.
COVID-19 wiped out the start of the F1 season, resulting in the cancellation of many races between March and June, which led to revenue dropping from $620m in the second quarter of 2019 to just $24m this year.
However with a rescheduled calendar kicking off in July, revenues have begun to recover, with the F1 Group earning $597m in the third quarter of 2020, although that’s still $36m down on 2019 for the same period.
That resulted in a loss of $104m compared to a $32m profit last year in Q3.
The rise in income on Q2 is reflected by the number of races that took place during the period, with 10 grands prix held between July and September, however it remains down on the same period last when just seven races were held.
This is because some of those races paid a reduced hosting fee due to a lack of fans, whilst some were subsidised by Formula 1 itself.
A statement from Liberty Media, which owns the sport, said: “Results in the third quarter of 2020 were impacted by the absence of fans, the location of races as well as the timing of the revised race calendar and pro rata recognition of certain revenue streams.
“Primary F1 revenue decreased mainly due to the limited race promotion revenue received since fans were prohibited at all but one race during the third quarter.
“This was partially offset by growth in broadcasting and advertising and sponsorship fees due to the impact of higher proportionate recognition of season-based income with three additional races during the current period, as well as the impact of recognising revenue over fewer races in 2020.
“However, both broadcasting and advertising and sponsorship revenues were lower than originally contracted.
“The altered schedule triggered lower broadcasting fees pursuant to the contractual terms within certain broadcasting agreements, and also led to other one-time changes as certain broadcasting fees were renegotiated for the current year.”
Its finances were also impacted by a “one-time changes in sponsorship contracts” because they were unable to deliver all “elements of a typical sponsorship offering”. The closure of the Paddock Club also hit finances.
Teams received a higher than normal payment for the July-September period which totalled $440m compared to $335m last year “due to one-time fees paid to teams upon signing the new Concorde Agreement.”
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