Liberty Media has posted a decreased revenue for the third quarter of the 2019 F1 season due to one less race in the period from 2018.
After posting increased revenues in Q1 and Q2, Liberty Media posted a decreased revenue in Q3 of the 2019 F1 season for the period between August and October, primarily due to one less grand in the similar period in 2018 - even though other income grew.
The total F1 revenue fell from $647 million to $633 in the period, where the primary revenue dropped from $560 million to $553 and the other F1 revenue seeing a drop from $87 million to $80. The Adjusted OBIDA increased from $158 million to $162.
At the same time, the operating income also increased from $39 million to $44. Like in Q2, Liberty Media noted about $10 million of corporate level selling, general and administrative expense, which includes stock-based compensation expense.
The explanation from Liberty Media stated:
"Primary F1 revenue is comprised of (i) race promotion fees, (ii) broadcasting fees and (iii) advertising and sponsorship fees. Results in the third quarter of 2019 were unfavorably impacted by the timing of the 2019 race calendar, with seven races taking place in the third quarter of 2019 compared to eight races in the third quarter of 2018.
"Race promotion revenue decreased due to one less race held in the third quarter of 2019 and the impact of the renewal terms of one contract. Broadcast revenue increased primarily due to contractual rate increases, partially offset by the lower proportionate recognition of season-based income during the quarter (7/21 races took place in the third quarter of 2019 compared to 8/21 in the third quarter of 2018).
"Advertising and sponsorship revenue increased due to revenue from new sponsorship agreements. Other F1 revenue decreased in the third quarter primarily due to one less race held in the third quarter of 2019 and non-recurring television production fees in the prior year period. Operating income and Adjusted OIBDA increased in the third quarter as the revenue decline was more than offset by reduced costs.
"Team payments were lower in the third quarter driven by the pro rata recognition of such payments across the race season, and other cost of F1 revenue was lower due to one less race in the quarter, which drove decreases in FIA regulatory fees, advertising and sponsorship, hospitality and other event based costs. Selling, general and administrative expense was relatively flat in the quarter."
In addition, F1 boss Chase Carey stated: "We were thrilled to have the World Motor Sport Council unanimously approve the 2021 regulations, which were the result of input from all stakeholders across the sport of F1.
"We believe these regulations stay true to the DNA of F1 while seeking to improve the competition and action on the track. This season continues to produce some spectacular racing and we congratulate Lewis Hamilton and Mercedes on their amazing achievements.
"We now look forward to the final two races of 2019 and a record 22 race 2020 season, including our new event in Vietnam and our return to the Netherlands." In overall terms, Liberty Media boss Greg Maffei noted about hitting the target set for 2019.
[Image courtesy: Red Bull Content Pool] [Note: This story was also written by me on FormulaRapida.net]