F1 has had to suffer a little loss in revenue for 2023’s second quarter compared to 2022. Imola GP’s cancellation was a big reason. While the loss is not huge, it does put a dent in the growth F1 has been enjoying. 2023’s overall numbers should pass the 2022 figures. Both seasons feature 22 races. However, the French GP last year was effectively replaced by the Las Vegas GP this year, which is more lucrative.
What happened to the Imola GP?
Incessant floods in the region caused the Imola GP to be cancelled this year. The floods caused immense damage to people and property. Formula 1 decided to not race in the region to help officials focus on more prominent issues.
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This means that only 6 races were held, rather than the planned 7, in the second quarter (April-June). In 2022, this period held 7 races. What’s noteworthy is that the revenue from race promotion is recorded in the quarter the race took place in. Meanwhile, the revenue from sponsorship and media rights is split proportionally across all 4 quarters. The proportions depend on the number of races during those periods.
Loss in Revenue
The loss of the Imola GP meant that F1’s second-quarter revenue dropped to $724 million from 2022’s $744 million. This included a loss of $10 million via primary revenue like sponsorship, media rights, and race fees. Other avenues added another $10 million to the losses.
The 10 teams also got $344 million this year, compared to $368 million last year. Interestingly, F1 reported an increase in profit with $52 million this year, up from $49 million in 2022.
The main culprit was the revision of the revenue via media rights. The individual race promotions increased because of the higher fees F1 is taking. Liberty Media reported an increased income from licensing and the F2 and F3 series.
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The amount of expenditure incurred due to the Imola GP contributed significantly to the losses. Liberty Media explained a lot of expenses for the Imola GP were incurred as the event was cancelled very late.
Lower freight costs were met with increased hospitality costs. Partner servicing costs increased as well as Formula 1 continues to add more partners. General expenses and expenses for selling and administration decreased. Increased costs for IT, property, and marketing offset this decrement. They also incurred some expenses in the planning of the Las Vegas GP later this year.
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