The economic rise of Formula 1 this year was on full display in Liberty Media’s latest quarterly earnings, and even bigger prizes await the motorsports property and its parent organization.
Liberty Media reported a 24% rise in F1 revenue to $887 million compared to the same period a year ago, while operating income rose 67% to $107 million.
Some scheduling variance is involved in those increases, as this year’s third quarter included an additional race. But, Liberty Media still saw F1 increase revenues across numerous core revenue lines, including media rights, sponsorship, and corporate hospitality.
“Our business is in a position of strength. Fan engagement is high, and commercial interest is strong,” said Stefano Domenicali, F1 president and CEO, told analysts. “The teams have sustainably improved their financial health, generating their own incremental sponsorship, which benefits our entire F1 ecosystem.”
F1’s focus is now heavily on the Nov. 18 Las Vegas Grand Prix, which is projected to be perhaps the property’s largest spectacle ever, as well as the most-attended sports event in Las Vegas history. Signs of the forthcoming race were found all over town, including grandstand seating, track lighting, and barrier installation now happening along the Las Vegas Strip.
Liberty Media disclosed it had spent $280 million thus far in 2023 in capital expenditures related to track and pit preparation for the Las Vegas GP, part of a previously projected $400 million in overall set-up costs for the event.
Company president and CEO Greg Maffei said many of those costs are one-time expenditures, and he remains bullish on the race’s long-term profit prospects.
“We did incur significant expense in launching year one in Vegas, and that included extra provisions for safety, security, and traffic planning, which was required by local regulators,” Maffei said. “We remain highly confident of … growing profitability in years two and beyond, and we remain bullish on the broader value creation that far outweighs the increased investment in start-up costs.”