COVID-19 – Finance and F1

As the COVID-19 (coronavirus) outbreak and ‘lockdown’ continues, we are learning about not only the timetable disruptions to the motorsport world – but also the finance implications for the likes of F1 too.

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While one can imagine the lost commercial opportunities for drivers and teams alike; Franz Tost (boss of Scuderia AlphaTauri) revealed to what his accountants project. “If we don’t drive a grand prix . . . it will cost one and a half to two million,” he states. “If nothing comes in at all all year round, it will be a very critical matter. If you don’t get any income at all, it’s obviously a disaster economically.”

Speaking to the media recently, Andreas Seidl (McLaren team principle) explained his thinking on what could be implemented to safeguard as many teams as possible. “I think the biggest risk that I see is that we lose teams if you don’t take decisive action,” he said. “We don’t know what the income will be this year. We don’t know when we will get back to racing again” and in terms of this year itself, he thinks “we need other short-term measures, like freezing the cars, in order to save costs.”

These sentiments echo a rally call of sorts from David Richards (chairman of Motorsport UK) back in March when he said “There will be motorsport companies who do not have the resources to get through this period. It is going to be a real challenge.” Looking back on previous hardship for F1, he remembers how “Bernie [Ecclestone] made sure that when there were tough times the smaller teams were looked after and I hope that Liberty [Formula One owners] see the common sense in that, too.”

Time will surely tell when the dust settles on this current period of time and the new landscape of the motorsport world (and the world in general) emerges. Until then we wait to see how the powers that be react and what new opportunities (such as the rise of iRacing and eSports) emerge.

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