Formula One’s massive profits revealed

Formula One’s massive profits revealed

A new report about the finances of Formula One motor racing has revealed the soaring profits generated by its owners.

The Formula Money report comes amid speculation that potential bidders are poised to make an offer for F1’s holding company.

The report shows that F1’s holding company, Jersey-based Delta Topco, made net profits in 2010 of $137.1m, and revenues of $1.6bn last year.

Last year the race teams were paid a total of $658m by the group.

CVC, which now owns 63.4 percent Delta Topco, made $87m from the sport in 2010, according to the report. And it brings to $800.8m the profits CVC has made in the five years since it paid $1.7bn for 69.6 percent of the group in 2006, according to Formula Money.

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The remaining $50m in profits were shared between investment banks and individuals who own the rest of Delta Topco, including Sir Martin Sorrell, boss of advertising giant WPP.

Christian Sylt, publisher of the annual report, told the BBC: “It’s an astonishing return.”

CVC bought majority control of F1 from Bernie Ecclestone’s family trusts and a group of investment banks. However Ecclestone remains the sport’s chief executive and a major shareholder in Delta Topco.

According to the report, Ecclestone and his family trusts have earned more than $148m in five years from their stakes in Delta Topco. The F1 boss has also received $31m in salary.

The largest source of revenue last year came from race-hosting fees of about $567.5m, paid by governments and track owners to host the events.

The increase in profits came despite falling TV audiences to about 527 million last year, and a slump in ticket sales.

Media speculation has linked Rupert Murdoch’s News Corporation as a possible bidder for F1’s commercial rights.

New Corp was rumoured to have sounded out a number of potential bid partners, most recently Exor, the Agnelli family’s investment vehicle, which indirectly owns Ferrari, F1’s star team.