F1 reports $92 million profit in 2021

F1 has reported a net profit of over $90 million for the first time in two years after a spectacular 2021 season.

Following the COVID-19 outbreak of early 2020, the sport’s revenues crashed from more than $2 billion per year to just over $1.1 billion, due to a high number of canceled races.

While FOM finally managed to host an impressive 17-race season after a delayed start, they could only do so without spectators at the venue, which forced the sport to rely entirely on broadcasting revenue.

An impressive 2021 season, when the sport held a record-breaking 22 races, saw revenues bounce back. Spectators slowly returned to race venues while viewer engagement nearly doubled.

According to the latest financial report released by Liberty Media – FOM’s parent company – revenues from last season surpassed the sport’s earnings from 2019 to just over $2.136 billion.

Furthermore, payments made to teams also doubled in 2021 compared to the previous seasons, with all ten teams taking away a combined $1.068 billion compared to just $786 million in 2020.

Explaining the major factors that impacted the recovery, Liberty Media said:

“Fan attendance continued to be assessed by relevant government authorities on a race-by-race basis throughout the year, with restrictions easing as the year progressed and significantly higher fan attendance beginning in the third quarter of 2021 compared to the prior year.”

It futher said:

“Race promotion revenue grew due to five more events held in 2021, including more non-European races, some of which saw the return of capacity crowds, whereas limitations on fan attendance in the prior year led to one-time changes in the contractual terms of races held.”

Interestingly, Liberty revealed that the sport’s revenues benefitted from a one-time cancelation fee paid by the Vietnam Grand Prix promoter after the race was scrapped.

Furthermore, FOM has also reported strong growth in its in-house F1TV streaming service, bringing in a steady stream of revenue, coupled with growth in contractual rates for other broadcasting rights.

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Record-breaking viewership figures drive F1’s revenue rebound

In 2021, F1 broke new viewership records as an intense title rivalry and one of the closest grids in recent memory drew in an astounding amount of new and returning viewership.

Compared to 2019, the sport’s viewership figures increased by more than 36% worldwide, while fan engagement on social media nearly doubled within the same period.

While much of the increased viewership is largely credited to Netflix’s behind-the-scenes docudrama Drive to Survive, other crucial decisions made by Liberty since their takeover in early 2017 have also played in F1’s recent success.

As well as making the sport more equitable in terms of revenue sharing and team budgets, the new owners have also strived to ensure that no single team can dominate the sport any longer, as Red Bull and Mercedes have done across the last decade.

These efforts created one of the closest seasons in F1 history last year, with teams across the grid being within a two-second performance gap across nearly every circuit the sport visited.

This led to more on-track racing and closer championship duels that played throughout the entire season, driving even more fan engagement.