Chase Carey: F1 has eliminated $1bn of debt

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Formula One owners Liberty Media has published its financial results for the second quarter of 2017, with F1 CEO Chase Carey claiming $1billion of debt has been "eliminated".

Liberty's results revealed F1 has recorded an increase in revenues year-on-year between April and June this term, earning a total of $616million. The figure is up three percent on the equivalent period from 2016, when Bernie Ecclestone was still at the helm of the sport.

"We've successfully eliminated an expensive $1bn tier of debt, repriced our remaining debt, and have also received upgrades from the ratings agencies," Carey said. "The combined effects of which will be to reduce annual interest expense by up to $90m going forward.

"Under impending expected changes to UK tax law, which are expected to be introduced shortly, and which will cap interest deductibility at a percentage of EBITDA, at our current level of pre-tax profitability the interest that has been saved would no longer be deductible in tax computations."

However, operating income has fallen from $90m to $45m as operating costs increased. Carey admitted an ongoing recruitment drive of senior staff means costs will continue to rise, while other investments such as Liberty Media's pursuit of new digital technology, and the F1 Live event in London have had an impact.

"The corporate head count has been sort of 70-75, and it has probably about doubled," he explained. "We're still building it out. We've hired most of the senior executives, but we haven't built the team out fully. We've talked roughly about $50m a year, and as we go through the planning and budgeting process this fall will probably get refined, because it is more than just head count.

"We had events like F1 Live in London that we think are the type of events that are important for us to engage with fans much more actively and broadly. We're engaged with digital partners. We don't really have an appropriate digital platform today, so there are investments that we've made to support a digital platform for us going forward. In the next few months for the first time we're refining our plans around that.

"I think we've had broad directions of where we're going, but I think as I said a lot of our planning and budgeting as we've brought people on board is still a work in progress," he added. "Realistically three or four months ago there were three of us in a temporary office. Certainly those plans will be refined between now and year end."

Liberty boss Greg Maffei has also confirmed Carey's salary is heavily tied to the financial performance of F1.

"The substantial majority of Chase's compensation is performance related, and tied into the operational performance at F1 directly, or the stock of the F1 Group," Maffei said.