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"We're not in the business of handouts," warns Carey

NEWS STORY
11/05/2020

Having revealed the disastrous financial impact of the coronavirus pandemic on the sport's revenues in the first quarter of the year - and which is certain to continue in the second quarter - Chase Carey held his now traditional conference call with financial analysts.

The lack of track action saw revenues crash by 84%, $39m (31.4m) trickling into the F1 coffers between January and March compared to the $246m (198.5m) over the same period last year.

Despite some of the recent positivity coming from the sport's bosses in terms of getting the season underway however, the American warned that the 'we're all in this together' cry does not mean that F1 can afford to be benevolent, giving handouts to those in need.

Financial readjustments within the company have seen $1.4bn added to the kitty, but Carey knows that the longer the pandemic continues, especially if more races have to be cancelled, the money won't last, and with no additional income in the pipeline the end result is inevitable.

Consequently, Carey has warned the teams, race promoters and partners to be realistic about the situation and not to expect the sport to be "handing out candy" to those in need.

"Whether it's the teams, promoters or sponsors, we're not going to be handing out candy to everybody," he said. "We're going to expect to be treated fairly, but we're going to deal with it as adults, and with the expectation that 2021 is going to look like the business that we all knew four months ago.

"In terms of the teams, 2020 for us and the teams, we're not going to have the results we expected to have when we started the year," her continued. "And I think everybody is doing what they can to shore up.

"Right now there are too many moving parts," he admitted. "There are so many 'what ifs,' that I don't think it's constructive to address parts of it. I think we need to get far enough along in these plans to know where we're at. We expect the teams to be taking the right initiatives to get them through it."

Earlier this week, Zak Brown revealed that the teams will be getting their prize money in full. However, the prize money is assessed at the beginning of the year based on financial projections for the year ahead, and at that time nobody could have predicted the disaster that was about to happen.

Approximately half-way through the season the projections are reassessed, and while it may well have originally appeared that the teams were going to get their prize money "in full", the pandemic's full impact will be reflected in the revised figures.

"The prize fund is a contractual formula," said Carey, "so the prize fund is what it is. Realistically we couldn't unilaterally change it if we choose. To expand on that, it's a percentage of profits, and profits will be down, and the prize fund would be down.

"Would we do something to support certain teams? We're not in the business of handouts, but that being said we'll engage with all our partners and figure out how do we go forward in a way that makes sense for everybody."

Fewer races will also impact the sport's sponsorship deals, and this is another issue the sport is addressing.

"We are working to achieve what we think will be the expectations of our sponsors," said Carey. "At the end of the day these are relationships, and these are long term relationships. We'll sit down as partners and find a fair path forward.

"We want them to feel good about what we do," he added, "but equally we have an obligation to deliver certain value, and if we deliver it, to receive fair value for it. We will approach as partners."

Though any opening races on the revised calendar will be held without spectators, it is hoped that be season end this will have changed. Nonetheless, Carey admits that the sport is aware of the plight of promoters.

"With fans that certainly does get much closer to the business at norm," he said. "But there are different cases... is it going to be a race that was going to held in the spring, and it's moved to the fall?

"Obviously it had implications in terms of selling tickets and the like, right now probably most of our promoters, even the ones on the schedule, aren't selling tickets given the uncertainty, and probably nobody's buying tickets.

"With everything that exists out there it's not business as usual," he admitted, "but I think to the degree we have races with fans, I think you also get the question is it a race with fans as you know it, or is it a race with fans with certain conditions around those fans? I think all those things we have to engage on."

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READERS COMMENTS

 

1. Posted by mickl, 11/05/2020 14:05

"@Bill Hopgood not unless the team's name rhymes with Berrari and the cars are painted red "

Rating: Positive (1)     Rate comment: Positive | NegativeReport this comment

2. Posted by Bill Hopgood, 10/05/2020 20:20

"Has F1 not been in the business of handouts for years? I mean, what about all those "historical" bonus payments to certain teams?"

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3. Posted by Wokingchap, 10/05/2020 11:27

""Would we do something to support certain teams? We're not in the business of handouts, but that being said we'll engage with all our partners and figure out how do we go forward in a way that makes sense for everybody."
Is that a Yes or a No? Too ambiguous."

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4. Posted by nnails, 10/05/2020 10:53

"If 3 teams leave f1 then the sports is gone. You will just be left with a billion dollar debt pile"

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