Formula 1 posts record $386m loss for 2020 season

Formula 1 posted a huge loss in 2020 as the COVID pandemic impacted the calendar and races were run without spectators.

Formula 1 posts record $386m loss for 2020 season

Liberty Media's full-year financial results, which were released on Friday, reveal that F1's income tumbled by 44% for a total loss of $386m - compared with the previous year.

Overall revenue crashed from $2022m in 2019 to $1145m last season, while the modest profit of $17m in 2019 turned into an operating loss of $386m after the teams were paid.

The total payments shared between the 10 teams fell from $1012m in 2019 to just $711m last year.

Liberty explained: "Team payments decreased in the full year driven by the contraction in F1 revenue and the associated impact on the calculation of variable elements of team payments.

"Team payments in 2020 included one-time fees paid to teams upon signing the 2021 Concorde Agreement."

The huge dive in race promotion fees was reflected in the fall in their percentage share of F1's primary revenue, down from 30% of the total in 2019 to just 12% last year. Most races either paid no fee, or a renegotiated one-off lower figure.

Explaining the fall Liberty noted: "Race promotion revenue decreased as fans were prohibited from attending all but three races, which led to one-time changes in the contractual terms of the originally scheduled races that remained on the 2020 calendar and limited revenue generated from the replacement races that were added."

Broadcast revenues accounted for a bigger percentage of the primary income total, up from 38% to 55%.

Although passing the minimum total of 15 races ensured that most broadcasters paid the full contracted amount for the season, Liberty has admitted that there was a payment reduction in some cases.

"Broadcast revenue decreased as the altered schedule triggered lower fees pursuant to the contractual terms of certain broadcast agreements, as well as other one-time contract negotiations that took place in 2020."

Advertising and sponsorship revenue's share of the primary income total was up slightly from 15% to 17%, although some income was lost, for example because races with specific title sponsors didn't take place.

Liberty explained: "Advertising and sponsorship fees declined driven by one-time changes in sponsorship contracts due to the cancellation of races to which contracted sponsorship inventory specifically related and the limited activities at the races, including hospitality."

While revenues were down, F1's costs also fell because of the shorter schedule and reduced number of flyaway races.

"Costs decreased in the fourth quarter and full year due to lower hospitality and lower freight costs from fewer, logistically cheaper races."

shares
comments

Related video

Alonso will be absent from Alpine F1 launch

Previous article

Alonso will be absent from Alpine F1 launch

Next article

Rowland hopes Mercedes doesn't dominate Formula E like F1

Rowland hopes Mercedes doesn't dominate Formula E like F1
Load comments
The other notable Monza escape that F1 should learn from Prime

The other notable Monza escape that F1 should learn from

OPINION: The headlines were dominated by the Italian Grand Prix clash between Max Verstappen and Lewis Hamilton, who had the halo to thank for avoiding potentially serious injury. But two days earlier, Formula 1 had a lucky escape with a Monza pitlane incident that could also have had grave consequences.

How Monza only added more questions to F1's sprint race conundrum Prime

How Monza only added more questions to F1's sprint race conundrum

With two sprint races under its belt, Formula 1 must now consider its options for them going forward. While they've helped deliver exciting racing on Sundays, the sprints themselves have been somewhat lacking - creating yet another conundrum for F1 to solve...

Formula 1
Sep 16, 2021
Who should Alfa Romeo sign for 2022's F1 season? Prime

Who should Alfa Romeo sign for 2022's F1 season?

OPINION: With Valtteri Bottas already signed up for 2022, all eyes are on the race for the second seat at Alfa Romeo next year. Antonio Giovinazzi is the current incumbent, but faces a tough competition from appealing short and long-term prospects

Formula 1
Sep 15, 2021
The "forced break" that was key to Ricciardo's Monza excellence Prime

The "forced break" that was key to Ricciardo's Monza excellence

OPINION: Daniel Ricciardo has long been considered one of Formula 1's elite drivers. But his struggles at McLaren since switching from Renault for 2021 have been painful to watch at times. Yet he's recovered to banish those memories with a famous Monza win – built on a critically important foundation

Formula 1
Sep 14, 2021
Italian Grand Prix driver ratings Prime

Italian Grand Prix driver ratings

Two drivers produced faultless performances as, for the second year in a row, Monza threw up an unpredictable result that left many to rue what might have been

Formula 1
Sep 13, 2021
Why Ricciardo would have won without Verstappen/Hamilton crash Prime

Why Ricciardo would have won without Verstappen/Hamilton crash

The clash between Max Verstappen and Lewis Hamilton was the major flashpoint the 2021 Italian Grand Prix will be remembered for. Yet by this point, race leader Daniel Ricciardo had already done the hard work that would put him in position to end his and McLaren's lengthy win droughts, on a memorable afternoon in Monza

Formula 1
Sep 13, 2021
Why Italian GP success is on for McLaren even if Verstappen dominates Prime

Why Italian GP success is on for McLaren even if Verstappen dominates

For the second time in 2021, McLaren will line up for the start of a grand prix from the first row. It knows it has the chance of "glory" if things go well for Daniel Ricciardo and Lando Norris at the start of the 2021 Italian Grand Prix, but even if they just maintain their grid positions, signs from the rest of the Monza weekend suggest success is very possible for Formula 1's other orange army

Formula 1
Sep 12, 2021
How Formula 1 has made itself unattractive to new teams Prime

How Formula 1 has made itself unattractive to new teams

OPINION: The Formula 1 cost cap has been billed as a saviour to several teams and helped to guarantee their viability for investors. But there already exists another mechanism that effectively had the same purpose, and serves as a strong deterrent for those with the means to go it alone in setting up a new team

Formula 1
Sep 10, 2021