Liberty Media CEO Greg Maffei says the company will be “thoughtful” about which scenario it takes with the 2020 Formula 1 season.
The Formula One Group, led by its CEO Chase Carey, is in the midst of trying to limit the fallout from the ongoing coronavirus pandemic, which has seen almost half of this year’s races cancelled or postponed and left teams facing a tough financial crisis.
Over the past week or so, however, there has been a little more optimism F1 could start racing again in July, with two potential double-headers in Austria and Britain being considered.
The only caveat is an inevitability that most races would have to take place behind closed doors and the Liberty chief explained how the impact of doing that means all options for this year are still on the table.
“We have scenarios for zero races, anywhere from 15-18 races, races that begin with no fans present and only the teams, we really have a host of opportunities or challenges on all fronts,” Maffei was quoted as telling investors on Thursday.
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“Chase [Carey] and his team are presented with multiple options but until you know the timing how do you ask someone to move an existing race in place of another race [when] you don’t know when [the country is] open?
“If you run races with no live audience we will obviously have lower profitability and, maybe even no profitability, we may be capitalised sufficiently to handle that for 2020, but there are teams that will incur costs, particularly those that don’t have minimum guarantees from F1, and their major revenue sources is their share of the profits of F1
“That’s one of the reasons why we need to be thoughtful of how we begin, that is not only good for us but good for the ecosystem,” he added.
“Chase and his team have run multiple scenarios. It’s not only when we are allowed by authorities, and in what format, but how does it work for the teams? How do we do something beneficial for fans but also doesn’t have the teams bankrupting themselves by conducting no profit or loss-making races?”
And limiting the financial impact on teams is a key aim for Liberty, who have already agreed multiple cost-saving measures as part of the rule-making Strategy Group, including a delay to the 2021 technical rules, limits on current car development and an ongoing battle regarding the budget cap.
However, they still haven’t been enough to prevent the company from having to dig into its own pocket to help some teams financially.
“We have advanced money in advance of team payments for certain teams already, there are cases where we might do more of that,” Maffei revealed.
“There’s other things we might do to bridge teams who may need help; we’re not viewing this as an open cheque book.
“We want to make sure the teams are solvent as they are part of what we need to race successfully in 2020, 2021 and beyond.”
This also comes after Liberty redistributed assets to the amount of $1.5bn from their Sirius XM Group to the Formula One Group as well as a $1.4bn cash injection after ending its link with the Live Nation Entertainment brand, which is also struggling amid the coronavirus.
Maffei later explained the move “reduced the risk to investors” and they responded positively as Formula One Group’s FWONK stock rose by 10 percent initially on the NASDAQ before giving back some of those gains later in the day.
