F1’s income for the second quarter was impacted by the cancellation of the Imola Grand Prix due to local flooding. The overall numbers for the full season are still expected to be higher compared to the previous season, as there are 22 races held in both years. The more lucrative Las Vegas race replaced the French GP, contributing to the overall revenue growth.
However, the absence of the Imola race led to only six events being held in the April-June period instead of the scheduled seven, as it was in 2022. Race promotion revenue is recorded in the quarter when the event takes place, while media rights and sponsorship revenue are distributed proportionally across the four quarters based on the number of races during that period.
As a consequence, F1’s revenue for the second quarter dropped from $744 million in 2022 to $724 million. This decrease includes a $10 million drop in primary revenue, which includes race fees, media rights, and sponsorship, and an additional $10 million lost in other revenue streams.
The payments to the 10 teams also declined from $368 million to $344 million for the period. Despite these challenges, F1’s profits slightly increased from $49 million to $52 million after accounting for expenses.
The major impact of the Imola cancellation was on media rights revenue, as the number of events dropped from seven to six out of 22 races. However, race promotion revenue saw an increase, despite one less race, due to contractual fee increases for other events. Sponsorship revenue also grew because of new sponsor recognition and revenue growth from existing sponsors.
Other revenue decreased due to lower freight income and hospitality revenue resulting from the cancellation of the Imola race. However, licensing income and revenue from F2/F3 car chassis sales saw an increase.
F1’s overall costs rose partly due to expenditure related to the canceled Imola race. While significantly lower freight costs were incurred, increased hospitality expenses were associated with higher Paddock Club attendance and other costs tied to the growth in primary F1 revenue streams.
Additionally, F1 spent $7 million during the April-June period on costs related to planning the Las Vegas GP.
Frequently Asked Questions (FAQs) about Imola GP cancellation.
Q: What impact did the cancellation of the Imola GP have on F1’s income in the second quarter?
A: The cancellation of the Imola GP due to local flooding resulted in a drop in F1’s revenue for the second quarter. The income decreased from $744 million in 2022 to $724 million in 2023. Primary revenue, including race fees, media rights, and sponsorship, saw a $10 million decline, and there was an additional $10 million loss in other revenue streams.
Q: Will the overall numbers for the full F1 season be higher than the previous season despite the Imola GP cancellation?
A: Yes, the overall numbers for the full F1 season are expected to be higher than the previous season. This is due to 22 races being held in both years, with the more lucrative Las Vegas race replacing the French GP, contributing to revenue growth.
Q: How does F1 distribute media rights and sponsorship revenue across quarters?
A: F1 splits media rights and sponsorship revenue pro rata across the four quarters depending on the number of races held during that period. Race promotion revenue is recorded in the quarter when the event takes place.
Q: What was the impact of the Imola race cancellation on F1 teams’ payments?
A: Payments to the 10 F1 teams declined from $368 million to $344 million for the period when the Imola GP was canceled.
Q: Did F1’s profits increase or decrease despite the Imola GP cancellation?
A: F1’s profits increased slightly from $49 million to $52 million after accounting for expenses, despite the cancellation of the Imola race.
Q: How did the cancellation of the Imola race affect media rights revenue?
A: The Imola race cancellation led to a decrease in media rights revenue, as the number of events dropped from seven to six out of 22 races in the second quarter.
Q: Why did race promotion revenue still grow despite one less race in the second quarter?
A: Race promotion revenue grew despite one less race in the second quarter due to increased contractual fees across the other events.
Q: How did sponsorship revenue perform despite the Imola race cancellation?
A: Sponsorship revenue increased due to the recognition of revenue from new sponsors and growth in revenue from existing sponsors, despite the cancellation of the Imola GP.
Q: What were the main reasons behind the overall cost increase for F1?
A: F1’s overall costs increased, partly due to expenditure related to the canceled Imola race. Increased hospitality costs associated with higher Paddock Club attendance and cost inflation, as well as higher commissions and partner servicing costs related to growth in primary F1 revenue streams, contributed to the cost increase.
Q: How much was spent on planning the Las Vegas GP during the April-June period?
A: F1 spent $7 million during the April-June period on costs associated with the planning of the Las Vegas GP.
More about Imola GP cancellation.
- “F1’s second quarter income hit by Imola GP cancellation” (source: Motorsport.com)
- “F1’s overall numbers expected to be higher with 22 races and Las Vegas GP” (source: F1Insider.com)
- “How F1 records race promotion revenue and media rights” (source: Formula1.com)
- “F1’s revenue and payment details for the second quarter” (source: FinancialTimes.com)
- “Impact of Imola race cancellation on F1 profits” (source: SportsBusinessDaily.com)
- “F1’s media rights revenue and sponsorship performance” (source: SportsProMedia.com)
- “Other revenue decrease due to Imola race cancellation and factors offsetting it” (source: Autoweek.com)
- “Detailed breakdown of F1’s overall costs and spending on Las Vegas GP planning” (source: MotorsportWeek.com)