Carey: We’ve successfully eliminated a $1-billion tier of debt

Formula 1 chief Chase Carey has revealed that a $1-billion debt has been eliminated as shown in the Liberty Media financial results for the second quarter of this year.

Carey confirmed, “We’ve successfully eliminated an expensive $1-billion tier of debt, repriced our remaining debt, and have also received upgrades from the ratings agencies. The combined effects of which will be to reduce annual interest expense by up to $90-million going forward.”

“Under impending changes to UK tax law, which are expected to be introduced shortly, and which will cap interest deductibility at a percentage of EBITDA, at our current level of pre-tax profitability the interest that has been saved would no longer be deductible in tax computations.”

Under Carey the Formula 1 management team has been bolstered significantly as the operation moves away from the slim on staff, one man show style management of the Bernie Ecclestone era.

Carey explained, “The corporate head count has been sort of 70-75, and it has probably about doubled. We’re still building it out. We’ve hired most of the senior executives, but we haven’t built the team out fully.”

“We’ve talked roughly about $50-million a year, and as we go through the planning and budgeting process this fall will probably get refined, because it is more than just head count.”

He also highlighted additional expenses that have arisen as part of F1’s new era, “We had events like F1 Live in London that we think are the type of events that are important for us to engage with fans much more actively and broadly.”

“We’re engaged with digital partners. 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. In the next few months for the first time we’re refining our plans around that.”

“I think we’ve had broad directions of where we’re going, but I think as I said a lot of our planning and budgeting as we’ve brought people on board is still a work in progress. Realistically three or four months ago there were three of us in a temporary office. Certainly those plans will be refined between now and year end,” added Carey.

Big Question: Is Formula 1 management on the right track withe Carey and his crew at the helm?