Formula One should have been on a roll last year. It added two new races and the world started to pull out of the recession. However, as Pitpass has already reported, the sport's fortunes stalled. Now, courtesy of an exclusive report in the Daily Mail, Pitpass' business editor Chris Sylt reveals that its returns from corporate hospitality have reversed.

The news comes from the accounts for the year ending 31 December 2010 of F1's corporate hospitality operation Beta Holdings and they show that its pre-tax losses widened more than three-fold to £3.2m ($5.2m). The business is majority owned by private equity firm CVC and the accounts reveal that it has racked up a combined £121.2m ($200m) loss on it since it was acquired in 2006. It is hardly a dream acquisition ticket for a would-be suitor.

Last year Beta Holdings' turnover nudged up by just £1.9m ($3.2m) to £93m ($153.5m) but this was not enough to compensate for a 3.3% rise in costs. The increase in the number of races boosted the overheads which include transporting 40,000 glasses, 30,000 plates, 10,000 cut flowers, 5,500 magnums of champagne, and 200 tonnes of tent material to each event.

Around 4,000 people are served in F1's hospitality area at every race and last year prices ranged up to £2,740 ($4,520) per person for a three-day ticket. Beta Holdings' financial director Duncan Llowarch says that "the prevailing economic conditions created a difficult environment for hospitality sales," and in an attempt to drive revenue, ticket prices have been increased by up to 12% in 2011.

CVC used a £173m ($285m) loan from the Royal Bank of Scotland (RBS) to buy the business and the debt incurs interest of between 1% and 3.5% on top of the interbak rate - the rate at which banks lend to each other. Repayment of the debt accelerated in the economic downturn as the interbank rate crashed to stimulate lending.

In 2010 Beta Holdings' interest payments of £3.3m ($5.4m) were £1.2m ($2m) less than the previous year and it paid off £9.8m ($16.2m) of the loan leaving £110.8m ($182.8m) outstanding at the end of the year. Unlike F1's rights holder, which is expected to be debt free by 2014, it may be some time before Beta Holdings generates enough cash to clear its loans.