A first look at the financial impact from coronavirus on Formula 1 has emerged after owners Liberty Media reported a dramatic loss in revenue for Q1 of 2020.
Under the original calendar, five races should have taken place so far this year, including the inaugural Grand Prix in Vietnam and the return of the Dutch GP at Zandvoort last weekend.
Instead, after the last-minute cancellation of the Australian GP back in March, the first 10 events have all either been cancelled or postponed due to Covid-19, with 2020 set to be the first year since 1954 that the Monaco GP won’t be on the F1 schedule.
The lack of action has almost wiped out F1’s revenue, with income plummeting from $246m in the first three months of 2019 to just $39m for the same period this year, a reduction of 84 per cent.
Almost all of that loss could be linked to the sport’s main revenue streams, race fees, broadcasting, sponsorship etc. which dropped from $198m last year to just $13m this year.
This meant operating losses for F1 spiked almost 200 percent from $47m in 2019 to $137m in 2020.
“We are operating in unprecedented times, impacting the Liberty portfolio across the globe,” CEO Greg Maffei said as the company reported its first-quarter figures.
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“Our companies in the live event space have been working with players, teams, bands, fans and government authorities to operate during social distancing and safely provide unique and engaging experiences. We thank our employees and partners for their dedication, flexibility and leadership.
“We were pleased to complete the reattribution between Formula One Group and Liberty SiriusXM Group in April,” he noted, in a move which gave F1 a $1.4bn cash injection.
“Liberty SiriusXM now includes Live Nation, a complementary business and an established leader in the entertainment space. SiriusXM posted solid first-quarter results and the business is proving resilient. Formula One Group has a strengthened balance sheet which will enable us to enhance the F1 business and be opportunistic.”
With no races currently planned until July, Q2 is expected to see even steeper losses, due to the loss of revenue from seven races and after Liberty forwarded some payments to teams that are struggling to continue due to the coronavirus.
McLaren CEO Zak Brown has also confirmed Liberty will pay teams 100 percent of prize money despite a likely reduced 2020 schedule in another move aimed to help those struggling outfits.