11/08/2020
NEWS STORY
As expected, the pandemic has seen F1's revenue crash alarmingly, Q2 witnessing a drop from $620m (£470m) in 2019 to just $24m (£18.2m) this year.
Indeed the $14m (£10.6m) profit that was Q2 in 2019, became a $136m (£103.2m)loss in the same period this year.
With no races in Q2, which covers April to June, income was almost non-existent, certainly in terms of race hosting fees which are one of the sport's biggest sources of income.
While the season finally got underway at the start of July (Q3), the pandemic means that races are being held behind closed doors which means that there will still be no hosting fees. Indeed, F1 is having to pay an undisclosed amount to circuit bosses in order for them to hold races.
Seeing the writing on the wall, in April, Liberty Media gave the sport a $1.4bn lifeline by transferring a 33% stake in events promoter Live Nation to the satellite radio broadcaster SiriusXM, essentially transferring from one branch of the Liberty empire to another.
The move, according to Liberty CEO, Greg Maffei, increased "cash liquidity by approximately $1.4 billion", which could be used "for F1 in event of continued delay of season, including preserving health of ecosystem."
The move gave F1 the cash required to meet its current loans as well as paying compensation to those race promoters where events had to be held behind closed doors as well as team prize money.
According to Liberty, it also eliminated "$1.3 billion of parent level debt" attributed to the F1 group and would leave sufficient cash "for opportunistic investments and acquisitions".
While Q2 in 2019 saw the teams receive $335m in prize money, this year there were no payments as there were no races.
The lack of cash coming in no doubt accounts for the eleventh hour (literally) deal that witnessed the 70th Anniversary Grand Prix acquire title sponsorship from Emirates on Saturday evening.
"Since there were no events held during the second quarter of 2020, revenue recognition was limited, with recognised primary F1 revenue in the period consisting only of the elements of sponsorship contracts associated with non-race related rights," said Liberty Media in its Q2 report.
"No race promotion fees nor broadcasting fees were recognised. Similarly, other F1 revenue decreased due to zero revenue being generated from the Paddock Club and other event-based and television production activities."
"F1 also utilised government-supported furloughs in respect of approximately 50% of its employee base for varying periods. Personnel costs are expected to return to more normalised levels in the third quarter as most furloughed staff returned to work in advance of the F1 season commencement."
"We were excited to return to the track in July and have now completed five races of what we expect will be a 15 to 18 race season," said Chase Carey, carefully avoiding mention of the numbers. "During the break we continued to move the business forward with a reduced cost cap for the 2021 season, and announced new broadcast and sponsorship deals.
"We re-engaged with added purpose and determination, announcing our #WeRaceAsOne platform, underpinning our sustainability, diversity and inclusion and community strategies," he added.
"#WeRaceAsOne was launched as an initiative to further our sustainability efforts, to stand united against racism, in the fight against COVID-19 and to further address inequality and diversity in F1," he continued. "We are thankful to the FIA, teams, promoters, our employees and other key partners that made this return to racing possible."
Even if the figures are alarming, stakeholders - including the teams - can at least bask in the warm glow of satisfaction that must surely come with the WeRaceAsOne hashtag.