F1 speeds past the $500m profits flag

Sponsorships with watchmaker Rolex and Emirates airline drive F1 revenues to new high.

Formula One has revealed that its profits accelerated past the US$500m (NZ$647m) mark on revenue of $1.7bn last year driven by new sponsorship deals with luxury watchmaker Rolex and the Emirates airline.

The results are disclosed in the accounts of F1's key operating companies for the year-ending December 31, 2013. For the first time they show how much revenue and profit come from F1's lucrative corporate hospitality and trackside advertising divisions.

The two were founded in 1983 by F1's chief executive, Bernie Ecclestone, and Paddy McNally, a former boyfriend of the Duchess of York. As both operations were based offshore, they didn't need to file public accounts, so their finances remained a mystery until now.

Last year CVC, the private equity firm which controls F1, streamlined its structure and incorporated two new UK companies - Formula One Marketing and Formula One Hospitality and Event Services, to sell corporate hospitality tickets, trackside advertising and sponsorship of the race series.

Their accounts show that corporate hospitality revenues rose by $0.7m to $87.8m last year, despite the loss of a grand prix in Spain, reducing the number of races to 19.

Advertising and sponsorship were given a bigger boost thanks to Rolex and Emirates becoming official partners of F1 in early 2013. This gives them benefits such as hoardings at the tracks and the right to use the F1 logo in advertisements.

The deals fuelled a $53.4m increase in advertising and sponsorship revenue to $259m. The net profit from this and corporate hospitality came to a combined $239.6m with a further $5.1m coming from F1's two junior series, GP2 and GP3.

The remainder of F1's revenue comes from race-hosting fees and broadcasters and flows into Luxembourg-based business Delta 2. Its 2013 accounts were released in April and showed underlying profits of $286m on revenue of $1.3bn. It brings F1's total turnover to $1.7bn with profits of $530.7m.

F1's high-octane results have made it an attractive acquisition target. CVC has already banked $4.4bn from F1, which it bought in 2005 using $965.6m from its Investment Fund IV and a $1.1bn loan from the Royal Bank of Scotland. CVC now owns 35 per cent of F1 and earlier this year was in negotiations about selling it to John Malone's Liberty Group.

Mr Ecclestone told The Daily Telegraph: "I don't think anything has changed. I think Malone still wants to do something. It's incredible to me why people take so long to do something they say they want to do." He added: "I don't think CVC are going to pursue a sale actively. Not by the end of the year, for sure."