Formula 1’s revenue for the second quarter of the financial year has dropped from $620million in 2019 to just $24m this year due to COVID-19.
The impact of the global pandemic led to F1 having to delay the start of its season, and the postponement or cancellation of several races. The 2020 season finally got underway behind closed doors on July 3 in Austria, meaning there were no events held in the second quarter of this year compared to seven races in the same period last year.
As a result, revenue was significantly down in the latest Liberty Media financial results, “with recognized primary F1 revenue in the period consisting only of the elements of sponsorship contracts associated with non-race related rights”. There was no income from race promotion fees, broadcasting fees or income generated from the lucrative Paddock Club.
However, since team payments – the largest outlay of the same period in 2019 at $335m – are recognized on a pro-rata basis as races take place on the calendar, there were no such payments in this period, while other cost-cutting measures that were implemented meant the deficit in revenue only resulted in an overall loss of $136m for the Formula 1 Group compared to a profit of $14m in Q2 last year.
“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,” Formula 1 chairman and CEO Chase Carey said. “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 reengaged with added purpose and determination, announcing our #WeRaceAsOne platform, underpinning our sustainability, diversity & inclusion and community strategies. #WeRaceAsOne was launched as an initiative to further our sustainability efforts, to stand united against racism, in fight against COVID-19 and to further address inequality and diversity in Formula 1.
“We are thankful to the FIA, teams, promoters, our employees and other key partners that made this return to racing possible.”