06/05/2020
NEWS STORY
Having previously warned that the spending war coupled with the coronavirus could cost the sport to lose four teams, McLaren boss, Zak Brown has revealed that despite the lack of action this year the teams will receive 100% of prize money.
Whether the season consists of 18, 8 or even no races, F1 has ensured that the teams will not suffer financially in terms of prize money, hence the recent decision to transfer in $1.4bn from another part of the Liberty empire.
Last month, Liberty - which reveals its results for the first three months of the year - transferred F1's 33% stake in Live Nation to another part of the company, the resultant $1.4bn in cash, according to CEO, Greg Maffei increasing "cash liquidity by approximately $1.4 billion", which can be used "for F1 in event of continued delay of season, including preserving health of ecosystem."
The move also eliminated "$1.3 billion of parent level debt" attributed to the F1 group and would leave sufficient cash "for opportunistic investments and acquisitions".
"We want to make sure that teams are solvent because they are part of what we need to race successfully in 2020, 2021, and beyond," he stressed.
Having issued a payment forecast before the pandemic, the teams are to be paid in full.
"Liberty is paying out against their forecast," Brown told the Guardian. "They are paid up 100%."
Prize money is the single biggest expense for F1, as it pays the teams 68% of its underlying profit. Last year the teams received around $1bn from the $1.5bn the sport generated.
"I think the move they made to put $1.4bn of cash into the bank was the responsible thing to do," said Brown, "they are not living in denial."
Nonetheless, the American admits that "it is going to be really tough" for the teams to find sponsors.
Believing that it is "achievable" for racing to get underway in July, Brown said that it "is looking like the first race will be in Austria. We will have a couple of races there then a couple in the UK at Silverstone. All behind closed doors.
"If that can all go off without a hitch I think you have got some momentum and energy back."