Liberty Media Corporation, Formula One’s parent company, announced positive first-quarter reports for 2021 as Formula One is on the road to recovery following the financial impacts of the Covid 19 pandemic.
In the first quarter of 2020, Formula One was hard hit by the Covid-19 pandemic as there were no races held within that period due to the onset of COVID-19 which led to a record-breaking loss of $386 million for the first three months of the year.
However, F1 had something to smile about at the end of Q1 2021 as they held an event (Bahrain Grand Prix) on March 28 which significantly boosted their first-quarter revenue for 2021.
The Formula One Group announced an overall revenue of $180 million for Q1 2021, an increase of $141 million compared to $39million generated in the same period last year.
Liberty Media said in the report:
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“During the three months ended March 31, 2021, F1 began reclassifying certain components previously reported in Other F1 revenue into Primary F1 revenue to better align with the way it currently evaluates the business.”
In addition, broadcasting revenue was renamed media rights revenue. The more significant components that were reclassified into Primary F1 revenue include fees for F1 TV subscriptions, fees for licensing commercial rights for Formula 2 and Formula 3 races, fees for the origination and support of program footage, fees for broadcast rights for Formula 2 and Formula 3 races and fees for advertising rights on Formula 1’s digital platforms.”
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Following the reclassification, Other F1 revenue is primarily comprised of freight and hospitality revenue. $4 million of Other F1 revenue was reclassified as Primary F1 revenue for the three months ended March 31, 2020 to conform to the current period presentation. The impact of the revenue reclassification for the years ended December 31, 2019 and 2020 can be found in Schedule 3 of this press release.”
Formula One now classifies its revenue into ‘Primary Revenue’ and ‘Other Revenue’. The primary revenue will include fees for F1 TV subscriptions, fees for licensing commercial rights, fees for advertising rights on Formula 1’s digital platforms amongst the rest. While the other revenue includes freight and hospitality revenue.
For the primary revenue, it reported a revenue of $159 million an increase of a staggering $142 million (835%) compared to $17 million for the corresponding period of 2020. While for other revenue, there was a 5% decrease from $21 million for Q1 2021 Q1 to $20 million for Q1 2021.
In addition, Formula One paid a total sum of $44 million as team payments in the first quarter of 2021 compared to nothing being paid in the corresponding period of 2020.
Formula One expects the fans to be in attendance in the first half of the 2021 season. “Fan attendance continues to be assessed by relevant government authorities on a race-by-race basis.” While decisions are pending for most events, Formula 1 expects fans to be in attendance in varying capacities at certain events in the first half of the 2021 season, with increasing numbers of fans at events as the season progresses.