Liberty boss “not worried” about F1 balance sheet after big losses

Liberty Media CEO Greg Maffei insists that he’s “not worried” about Formula 1’s balance sheet as the sport tries to recover from a tough 2020 season.

Liberty boss “not worried” about F1 balance sheet after big losses

Liberty announced on Friday that F1’s revenues fell by 44% from 2019 to 2020, resulting in a substantial operating loss of $386m and less income divided between the 10 teams.

Maffei remains confident that the financial performance will improve in 2021 as spectators return to events and the revenue from race promotion fees increases. Liberty has been hit hard by COVID-19, with its other divisions – notably the Atlanta Braves baseball team and Live Nation concert promotion company – also losing income.

“I think one of the things about being part of the Liberty group is we have the ability to hopefully look ahead and be thoughtful with the benefit of our operating companies,” Maffei said in a call with Wall Street analysts.

“The F1 balance sheet is very, very strong. I think the operating levels that we have in our agreements are fine. So I'm not really worried about the balance sheet.”

Read Also:

Maffei said that all of Liberty’s businesses will be ready when the world emerges from COVID restrictions: “We certainly aren't in the crystal ball business exactly.

“But we are in the business of trying to prepare to make sure we benefit when it does open, and that we're prepared if that doesn't happen at the rate of change or pace that we would like.”

Maffei conceded that even if fans return to F1 races in 2021, it won’t be in the usual numbers over the full season. That will, in turn, inevitably hit income from race promoters.

“We're going to have a variety of alternatives where fans will be to some degree there,” he said. “And I don't think it will be binary, we're not necessarily going to see zero to 100.

“But we'll be somewhere potentially in between. So I'm more optimistic as we go to the end of the year that we're going to get to 100 percent of capacity. I think promotion [income] will be still reduced in ‘21, certainly versus what we would have in a non-pandemic year. We will have restricted audiences, and restricted fans at some of our events.

“We're not here to make a forecast, in part because some of this is still up in the air, floating around. It'll definitely be impacted, the amounts to which we'll see.”

Maffei is confident that F1 broadcast income, which took a hit due to the reduced calendar in 2020, will be back to usual levels in 2021.

“We expect a fairly normal broadcast revenue stream in light of our 23 races," he said. "Again, no crystal ball about exactly how COVID plays out. But our goal was to try and take the pain in ‘20, to the degree that we rightly had to make concessions to some of our broadcasters – our goal was to do as much as possible make that a '20 event, and bring '21 back to normal.

“That is our hope and our expectation. But COVID could change that, as a warning.”

Read Also:

Looking further ahead Maffei insisted that the new Concorde Agreement will ultimately generate a greater share of income for F1 as its profits increase.

He said: “Going forward, with the new Concorde Agreement we have a structure which as we increase profitability, we have the opportunity to take back some of what historically F1 earns. Over the years, the rates get a little more attractive for us.

“Whether we'll hit that in ‘21, given the risks around pandemic, I'm not as confident, but in the years going forward, as we continue to have a fully healthy business, I do believe our share of the margin will slightly increase.”

shares
comments

Related video

Perez: Red Bull drive will "open many doors" for the future

Previous article

Perez: Red Bull drive will "open many doors" for the future

Next article

Bahrain to offer COVID-19 vaccinations for F1 test and race attendees

Bahrain to offer COVID-19 vaccinations for F1 test and race attendees
Load comments

About this article

Series Formula 1
Author Adam Cooper
Why Russell was right to be wrong about Bottas after Imola F1 clash Prime

Why Russell was right to be wrong about Bottas after Imola F1 clash

George Russell and Valtteri Bottas' collision at Imola on Sunday prompted fury in the Formula 1 paddock. But Russell's carefully-worded heartfelt statement later, acknowledging that his initial response was wrong, proved the right move

How Verstappen and Hamilton’s Imola clash sets the tone for 2021 Prime

How Verstappen and Hamilton’s Imola clash sets the tone for 2021

In Max Verstappen's Formula 1 career to date, he has been cast as the 'pretender', an acknowledged top-line performer without the car to regularly challenge Lewis Hamilton. But that no longer applies in 2021, and the start to the Emilia Romagna Grand Prix was the most telling signal yet of what we can expect from their duel this year

Formula 1
Apr 21, 2021
How "overwhelming" McLaren move has given Ricciardo a new verve Prime

How "overwhelming" McLaren move has given Ricciardo a new verve

Daniel Ricciardo has found a new lease of life at McLaren – a move that’s been years in the making, as he explains to STUART CODLING…

Formula 1
Apr 20, 2021
How 2021's midfielders have taken lessons from F1's top teams Prime

How 2021's midfielders have taken lessons from F1's top teams

Formula 1’s latest Imola adventure turned into an expensive trip for many teams due to several crashes throughout the weekend. While balancing the books is an added factor in 2021 with the cost cap, a few midfield teams have cashed in early on development investments.

Formula 1
Apr 19, 2021
Emilia Romagna Grand Prix Driver Ratings Prime

Emilia Romagna Grand Prix Driver Ratings

A frantic wet race at Imola produced plenty of excitement and drama as drivers scrabbled for grip. Amid the hatful of mistakes and incidents that ensued, who kept their noses cleanest?

Formula 1
Apr 19, 2021
How the Emilia Romagna GP result hinged on three crucial saves Prime

How the Emilia Romagna GP result hinged on three crucial saves

Rain before the start of the Emilia Romagna Grand Prix promised to spice up the action, and the race certainly delivered on that. Max Verstappen got the best launch to win from Lewis Hamilton, but both got away with mistakes that could have had serious consequences

Formula 1
Apr 19, 2021
The back-bedroom world-beater that began a new F1 era Prime

The back-bedroom world-beater that began a new F1 era

The first in a line of world beaters was designed in a back bedroom and then constructed in a shed. STUART CODLING recalls the Tyrrell 001

Formula 1
Apr 18, 2021
Why Mercedes isn't confident it's really ahead of Red Bull at Imola Prime

Why Mercedes isn't confident it's really ahead of Red Bull at Imola

While Mercedes struck back against Red Bull by topping the times at Imola on Friday ahead of the Emilia Romagna Grand Prix, the overall picture remains incredibly close. Despite having a possible edge this weekend, the reigning Formula 1 world champion squad is not taking anything for granted...

Formula 1
Apr 16, 2021