Liberty Media confirmed that Formula 1 raised a $92million [£68.7million] profit in 2021, bouncing back after massive losses in 2020 following the start of the Covid-19 outbreak.
The sport lost almost half of its revenue when the pandemic hit, with $1.145bn amassed in 2020 compared to $2.022bn the year before. Its overall operating loss came in at a whopping $386m in 2020 as a result, although Liberty CEO Greg Maffei insisted that their finances were strong enough to deal with such a hit at the time.
Despite the loss, the sport still limited the damage of what might have been after a quickly-arranged 17-race calendar was put together that season, albeit without fans in attendance for the most part.
But the returning of crowds in 2021 fuelled a recovery in the sport’s finances, as well as a one-off payment the sport received after the cancellation of a contract to hold a race in Vietnam – which had been pencilled in to debut on the calendar in 2020, but other factors helped the sport’s gross income rise to $2.136bn, with the $92m net profit coming even after paying the teams’ prize money.
“Fan attendance continued to be assessed by relevant government authorities on a race-by-race basis throughout the year, with restrictions easing as the year progressed and significantly higher fan attendance beginning in the third quarter of 2021 compared to the prior year,” Liberty Media wrote when confirming their financial results.
“Race promotion revenue grew due to five more events held in 2021, including more non-European races, some of which saw the return of capacity crowds, whereas limitations on fan attendance in the prior year led to one-time changes in the contractual terms of races held.
“Race promotion revenue for the full year also benefited from a one-time settlement recognised in the first quarter related to the cancellation of a race originally scheduled to commence in 2020.
“Media rights revenue increased for the full year driven by higher broadcasting fees due to improved terms in certain new and renewed broadcasting agreements, other contractual rate increases, strong growth in F1 TV subscription revenue and the effect on the prior year of one-time changes in contract fees resulting from the pandemic and associated calendar disruptions.
“Sponsorship revenue increased due to revenue from new sponsors and the impact of more races held as well as pandemic-related reductions to sponsorship revenue recognised in the prior year.”
The continued gradual relaxation of Covid-19 rules around the world may enable fan attendance to rise even further in 2022, which combined with a record 23-race proposed calendar could bring even more revenue to the sport this season.
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