Formula 1 | Freight inflation can be seen in F1 accounts

F1’s recent financial results have been excellent, with revenue increasing (see our article). But as we reported, they also hid potential bad news for the sport in the medium term: the return of inflation.

Inflation is particularly related to transport and logistics costs. Like all over the world, prices have exploded… By the beginning of 2021, the price of transporting a container had increased fivefold compared to 2019! Although it has fallen a bit since then, it remains at historically very high levels. And the teams, especially at the top, complain to the FIA, to demand an increase in the limited budgets.

Brian J. Wendling, F1’s head of accounting, gave us more details on the magnitude of this inflation in just the last quarter (when inflation could still be accelerating).

“F1’s ‘other income’ is up considerably from a year earlier, around $80 million in the second quarter and $130 million year-to-date compared to 2021. The increased revenue of goods transport and hospitality accounted for 98% of the quarter. increase. »

“F1’s other revenue costs are higher mainly due to the same factors. These costs increased by $76 million in the second quarter, approximately 75% of which was due to changes in transportation and hospitality costs. »

For F1, inflation also translates into revenue increases (the sport charges the majority teams for freight). But in the long run, will the build-up be sustainable for the teams that have to foot the bill? Especially with a 24-race schedule that would string together, say, Grand Prix hat-tricks?

Maffei reports that F1 is still in good shape

However, F1 seems to have enough to digest inflation. Demand is still very high at the circuits, so F1 could raise ticket prices without emptying the stands.

Greg Maffei, CEO of Liberty Media, pointed to good news, in particular, about the audience on and off the tracks.

“F1 continued to record attendance and viewership records in the second quarter. The Austrian Grand Prix was our second Sprint event of the year and the audience was up 39% compared to qualifying for the same Grand Prix in Austria in 2021. We also benefit from the return of CCTV coverage, which stimulates our audience in China. »

“This year, four races have attracted more than 300,000 spectators, with incredible demand for the Paddock Club. The Hungarian weekend, for example, with 290,000 spectators, was the biggest-ticket sporting event in Hungarian history. »

“So we’ve seen strong ticket sales and some tours are already sold out for the rest of the year. »

Overall, Maffei believes that these packed grandstands also validate the fruits of the new aerodynamic regulations for 2022.

“The new regulations that were part of the Concorde agreement are a success and allow for closer combat and more advances. »

“We also continue to work hard with the development of new fuel and sustainable engines. And we believe this will have implications for the entire transport industry. »

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