With as many as the first eight races currently in doubt to begin the 2020 Formula 1 season, questions are being asked of the financial impact on teams.
Figures released for last year revealed $1bn in prize money was to be distributed between the teams, of course depending on their finishing position in the championship, with other financial bonuses given to mostly the top outfits.
As it stands, Liberty is still obliged to make prize money payments at the end of each month and in fact, teams will have just got the last amount owed from the 2018 season at the end of February and should start getting their 2019 winnings from this month.
But while those certainly at the front of the grid are likely to be unimpacted, it is those towards the back barely getting by who could be most at risk from a drop in the sport’s revenue.
“If we don’t go to races, what happens to the prize-fund money? Does this decrease?” Williams deputy team boss Claire Williams asked in Australia.
“At the moment we’re just hoping that’s not the case, and obviously we’re having discussions about insurance.”
Also Read:
- F1 CEO Carey rebukes Hamilton: If cash was king we’d race in Australia
- Mercedes revealed as swing vote in decision to cancel the Australian GP
Despite efforts to reschedule some events, F1 motorsport director Ross Brawn has already indicated the number of races will drop from the record 22 that were planned to around 17 or 18 at best, though even that figure may now be optimistic as the situation worsens by the day.
Each race cancelled sees roughly $25m in revenue lost just from hosting fees alone, based on the average revealed by business outlet Forbes, showing how important it is to try and reschedule as many events as possible.
Then F1 also has to consider refunds to those who bought Paddock Club hospitality packages and the biggest contributor to their pot, the broadcasters, who would be eligible for a cut in fees if the number of races dropped below 15.
In addition, the global economic uncertainty has seen the stock price for F1 crash on the NASDAQ in New York, which is now valued much less than what Liberty Media paid for the sport back in 2016, around $8bn.
This also comes as teams already faced a tougher year financially trying to combine development of this year’s car and the all-new designs planned for 2021.
Though one small irony is it has been suggested, in an effort to complete this season, F1 could extend the calendar into next year and postpone the new regulations until 2022.
That though may depend on just how many races can go ahead as planned.
“Will we race this year? I honestly have no idea,” Haas team boss Guenther Steiner said via RaceFans
“In the coming days we will see what the year will look like.
“I’m pretty sure we will race this year, and hopefully we get this virus under control for the whole world so the world can go back to a normal life.”