Formula 1 says it will work with teams and partners to assist with losses that will be incurred due to the pandemic, but warned it won’t be “handing out candy.”
Liberty Media announced the Formula One Group’s Q1 earnings for 2020 on Thursday, revealing a substantial reduction in revenue, due to the absence of any grands prix.
Of the events that can take place Formula 1 is having to negotiate reduced fees with promoters, due to the absence of fans, while broadcasters and sponsors may also seek amended terms.
Formula 1 teams are also striving to cut costs, with some having furloughed staff, owing to the reduced prize fund that will be available from Liberty Media.
“We’re not going to have the results we’re going to have when we started the year, or expected to have,” Formula 1 CEO Chase Carey said.
“We expect teams to be taking the right initiatives to get them through it. Priority one in many ways is when we get to 2021 is to have the sport back on track it was on at the beginning of the year for 2021, that’s our goal, what we’re committed to get to, manage through this year as best as possible.
“There’s been speculation at this point as to what degree do we need to help support select teams, we care about the teams, but those are not discussions we’ve had to date.”
Formula 1 takes a large portion of its income from race fees paid by promoters while it has six primary partners that feature prominently at each grand prix.
“At the end of the day these are long-term relationships, most of our sponsors are long-term, and we’ll sit down to work a path forward,” said Carey.
“We want them to feel good about what we do but equally we have an obligation to deliver a certain value and if we deliver it we expect to receive a value for it, but we will approach as partners.
“What we’re managing through is a short one-time event for us, we think the strength in this sport, the interest we’ve got, whether from fans or partners, will enable us to get back there [to where the sport was at the end of 2019].
“We will certainly expect to get fair value this year, we’re not going to play hard ball [but] whether it is the teams, promoters or sponsors, we’re not going to be handing out candy to everybody.
“We’re going to expect to be treated fairly but we’re going to deal with it as adults, with the expectation that 2021 is going to look like the business we all knew four months ago.”