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.”
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.”
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.”