F1 teams receive advance payments amid crisis

Formula 1 teams have have received payments in advance in order to protect the sport's "ecosystem" amid the coronavirus crisis.

F1 teams receive advance payments amid crisis

Teams are paid a percentage of F1's overall income, which has taken a major hit as more and more races are lost from the calendar.

The top teams have some guaranteed fees under deals negotiated in the Bernie Ecclestone era, but those further down the field rely solely on a share of F1's ongoing profitability.

Liberty Media president and CEO Greg Maffei says that in order to help them through the current crisis, some teams have received early payments.

F1 is trying to plan a start to the season, even if that means races without spectators, in order to guarantee income from TV companies and its own sponsor partners.

"We have scenarios for zero races, anywhere from 15-18 races, races that begin with no fans present and only the teams," Maffei said in a call with Wall Street analysts.

"We really have a host of opportunities or challenges on all fronts. Chase [Carey] and his team are presented with multiple options – including until you know the timing how do you ask somebody to move an existing race in place of another race when you don't know when it's open?

"So we are watching how the opening of certain events is happening in Western Europe, in certain countries, and looking at options around that that maybe the start of the calendar. No guarantees yet, but that is certainly something that would be attempted."

Read Also:

Maffei stressed that races held behind closed doors would inevitably hit F1's income – and hence that of the teams – as such events won't involve a traditional host fee from promoters.

"There are challenges around how you do all that which require incremental capital as well. If you run races with no live audience, we'll obviously have lower profitability, maybe even no profitability.

"We may be sufficiently capitalised to handle that for 2020, but there are teams which will incur costs, particularly those which don't have minimum guarantees from F1, and one of the major if not their major source of revenue is their share of the profits of F1.

"There's a degree that we're running profitable or not profitable races, but they still need to incur all their costs of running their terms. It's a challenge.

"How do we do something that is beneficial for fans, but also doesn't have the teams bankrupting themselves by conducted no profit, or loss, races?

"We're not encouraging using our cash in an unwise fashion, but we're trying to balance the operating business and its current results against the operating results of our partners in the form of the teams, who do incur large costs.

"We have advanced money in advance of team payments for certain teams already. There are cases where we may do more of that. There are other things that we might do to bridge teams that might need help.

"We're certainly not viewing this as an open chequebook. 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."

Regarding how soon F1 could get up and running, Maffei contrasted the sport with baseball, in which Liberty had an interest via the Atlanta Braves.

"The lead time really depends on a lot of things, how quickly can you get a team or series of teams that have been viewed as 'clean' to a location, where that location is, I think there are a lot of variables there.

"There is a benefit here in that you probably don't need two weeks of spring training to get the drivers back in form the way you need to get the players back in form. The drivers can probably race any time if you can get them and their team to a location safely."

shares
comments
McLaren: Extending season to '21 won't cause contract issues

Previous article

McLaren: Extending season to '21 won't cause contract issues

Next article

Vettel had upper hand on Leclerc in races - Heidfeld

Vettel had upper hand on Leclerc in races - Heidfeld
Load comments
Why Alfa's boss is up to the task of securing a stronger F1 future Prime

Why Alfa's boss is up to the task of securing a stronger F1 future

Two tenth places in recent races have lifted Alfa Romeo to the head of Formula 1's 'Class C' battle in 2021, but longer-term the Swiss-based squad has far loftier ambitions. With the new 2022 rules set to level out the playing field, team boss Frederic Vasseur has good reason to be optimistic, as he explained to Motorsport.com in an exclusive interview

How Barnard's revolutionary McLaren transformed F1 car construction Prime

How Barnard's revolutionary McLaren transformed F1 car construction

The MP4/1 was pioneering by choice, but a McLaren by chance. STUART CODLING relates the tangled (carbon fibre) weaves which led to the creation of one of motor racing’s defining cars

Why the end is nigh for F1’s most dependable design tool Prime

Why the end is nigh for F1’s most dependable design tool

Wind tunnel work forms the bedrock of aerodynamic development in Formula 1. But as Pat Symonds explains, advances in virtual research are signalling the end of these expensive and complicated relics.

Formula 1
Jun 13, 2021
Why Mosley’s legacy amounts to far more than tabloid rumour Prime

Why Mosley’s legacy amounts to far more than tabloid rumour

The newspapers, naturally, lingered over Max Mosley’s tainted family history and niche sexual practices. But this is to trivialise the legacy of a big beast of motor racing politics. Stuart Codling weighs the life of a man whose work for safety on both road and track has saved hundreds of thousands of lives, but whose penchant for cruelty remains problematic and polarising.

Formula 1
Jun 12, 2021
Why pragmatic Perez isn't fazed by no-nonsense Red Bull F1 culture Prime

Why pragmatic Perez isn't fazed by no-nonsense Red Bull F1 culture

Sergio Perez has spent most of his career labouring in Formula 1’s midfield, wondering whether he’d ever get another shot at the big time. Red Bull has handed him that chance and, although life at the top is tough, the Baku winner is doing all the right things to get on terms with Max Verstappen, says BEN ANDERSON

Formula 1
Jun 11, 2021
What the data tells us about the F1 2021 title fight Prime

What the data tells us about the F1 2021 title fight

Formula 1 has been tracking car performance using timing loops mounted every 200m around each circuit – to the extent that it was able to anticipate Ferrari’s 'surprise’ pole in Monaco. PAT SYMONDS explains what this means for this season and beyond

Formula 1
Jun 10, 2021
The weighty issue F1 needs to find a balance with Prime

The weighty issue F1 needs to find a balance with

OPINION: After consecutive street races with contrasting highlights, one theme stood out which has become a prevalent issue with modern Formula 1 cars. But is there a way to solve it or, at least, reach a happy middle ground to help all parties?

Formula 1
Jun 10, 2021
The changes behind a 'feel-good' F1 result in Baku Prime

The changes behind a 'feel-good' F1 result in Baku

OPINION: The Azerbaijan Grand Prix had elements that make Formula 1 really exciting – unpredictability and shock results. This resulted in heartbreak for several of the championship’s regular contenders and joy for others who rarely reach the ultimate limelight. And one of those on the Baku podium is riding a wave of form he’s keen to continue

Formula 1
Jun 9, 2021