F1 records $104-million loss in Q3 amid pandemic

After recording total revenues of $633m from July to September in 2019, for which it turned a $32m profit, F1 only managed $597m over the same period this year, with the pandemic resulting in a $104m loss due to both a disruption to revenue streams and additional expenses.

"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," F1's owners Liberty Media, said in a statement.

"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."

Specifically on the subject of sponsorship losses, Liberty explained that the sport "has been prevented from delivering all elements of a typical sponsorship offering due to the cancellation of races to which contracted sponsorship inventory specifically related, and the limited activities at the races, including hospitality, leading to one-time changes in sponsorship contracts.

"Other F1 revenue decreased in the third quarter due to the non-operation of the Paddock Club and lower freight revenue."

Liberty also noted its payments to teams were up from $335m in 2019 to $440m in 2020 "due to one-time fees paid to teams upon signing the new Concorde Agreement."

Looking to Q4, the signs point to further losses for Liberty, with no fans expected at the remaining races in Turkey, Bahrain (twice) and Abu Dhabi.