Liberty Media announces $1bn F1 debt reduction
Despite Formula 1 being on its summer break, new owners Liberty Media’s CEO Chase Carey has surprised everyone when he announced that they had “eliminated an extensive $1bn tier of debt” associated with CVC’s operation of F1.
In revealing its interim financial figures for the second quarter of 2017, Liberty Media revealed that F1 registered a three-per-cent increase in revenue, up to $616m (£475m).
Operating income fell from $90m (£70m) to $45m (£35m), with sales, general and administrative expenses all increasing by around 33%.
The debt repayment was financed by an initial equity offering that generated $388m coupled with subsequent refinancing which has allowed the old CVC structured debt to be fully repaid.
“The combined effects will be to reduce annual interest expense by up to $90m going forward,” Carey told media.
The knock on effect of this could mean more money for the teams going forward! But Carey added that the operating costs would continue to rise for the rest of the year as the company had not yet finished putting their final executive team in place despite the FOM staff complement having already doubled to nearly 75.
“We've hired most of the senior executives, but we haven't built the team out fully,” Carey continued. “We don't really have an appropriate digital platform today, so there are investments that we've made to support a digital platform for us going forward."