Formula One does OK in 2008

CVC Capital Partners has filed the 2008 accounts for its Delta 3 (UK) Ltd subsidiary, the parent company of the Formula One group. These reveal that the revenues of the sport rose by $120m (13% ) to $1.06bn in the course of last year. The company costs rose to $45m, including $30m in salaries for the 250 staff. Delta 3 had to write off $22m as a result of the termination of its agreement with the promoter of the Canadian GP.

The accounts, however, reveal that the 18 races generated an average income of $47.9m, which was a slight improvement over 2007 due to the fact that new race promoters in Singapore and Valencia were paying higher fees and because of new TV rights deals that were agreed.

Delta 3 remains heavily in debt as a result of the $2.45bn loan which was taken out in December 2006. This must be repaid in full by the end of June 2014 and in the course of 2008 Delta 3 paid $624m towards clearing this debt. This means that at the end of last year the debt was down to $1.8bn. This was deemed by the directors to be "satisfactory". The company was due to pay out $521m to the teams, an increase of $179m over 2007, this was thanks to an agreement with the teams that they would stay in the sport until the end of 2012. Not all of this money was paid out because of the ongoing discussions about a new Concorde Agreement. Delta 3 ended up with a loss of $518m because of a payment in kind of $573m to parent companies offshore, which were settling previous debts.

The company was protected from the recession by its many long term deals but it will be interesting to see ho Delta 3 does in the course of 2009 as the teams will have had to be paid up to date and the debt repayments remain around the same level.

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