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Classics Due to the corona crisis: Formula 1 slips into a financial record loss in 2020

19:02  26 february  2021
19:02  26 february  2021 Source:   motorsport-total.com

"Motorsport was always the DNA": Abt questions exits from Audi and BMW

 © Motorsport Images Abt-Audi is one of the top teams in Formula E German automobile racing is in a state of upheaval. The DTM will no longer exist in its previous form and will be repositioned with GT3 vehicles next year. Audi and BMW recently announced their early exit from the Formula E . In addition, Volkswagen has announced that it will completely end its motorsport involvement.

In der wegen Corona verkürzten Saison 2020 entstanden hohe Verluste © Motorsport Images In the 2020 season, which was shortened due to Corona, there were high losses

Because the Corona pandemic affected the calendar and most races had to take place completely without spectators, Formula 1 recorded in the 2020 season a loss of 386 million dollars (around 317 million euros). This means that revenues have fallen by 44 percent compared to the previous year.

That comes from a financial report from Liberty Media, which was released today. Total revenue fell from $ 2,022 million in 2019 to just $ 1,145 million last season.

The modest profit of $ 17 million last year turned into an operating loss of $ 386 million with the crisis after the teams were paid. The total payments shared between the ten teams fell from $ 1,012 million in 2019 to $ 711 million in 2020.

"Motorsport was always the DNA": Abt questions exits from Audi and BMW

 © Motorsport Images Abt-Audi is one of the top teams in Formula E German automobile racing is in a state of upheaval. The DTM will no longer exist in its previous form and will be repositioned next year with GT3 vehicles. Audi and BMW recently announced that they would soon be leaving Formula E. In addition, Volkswagen has announced that it will end its motorsport involvement completely.

"Promotion Fees" halved in 2020

"Team payments fell for the full year due to the decline in Formula 1 revenues and the associated impact on the calculation of the variable elements of the team payments, "explains Liberty Media.

The enormous slump in "Promotion Fees", i.e. the money that the racetrack operators pay to Formula 1, is reflected in the decline in their percentage share of the main income, which rose from 30 percent of total income in 2019 to just twelve percent in fell last year.

Most Grand Prix organizers either paid no fee at all or a newly negotiated, one-off lower sum due to the lack of spectators on site.

Decline in TV fees and sponsors as well

"The income from race promotion declined because fans were banned from participating in all but three races, which resulted in one-time changes to the contractual terms of the originally planned races, which remained in the 2020 calendar, and resulted in limited revenue from the added replacement races, "said Liberty.

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A larger percentage of the total pool was made up of broadcast revenues, which rose from 38 to 55 percent. Overall, however, they also fell, "as the changed schedule led to lower fees in accordance with the terms of certain broadcast agreements," says Liberty, confirming the decline in some cases.

The share of advertising and sponsorship income in the total rose slightly from 15 to 17 percent, although here too some funds were lost because, for example, races with certain title sponsors did not take place.

Not only revenues, also costs have decreased

Liberty says: "The advertising and sponsorship revenues decreased due to one-time changes in the sponsorship contracts through the cancellation of races, to which the contractually agreed sponsorship inventory specifically referred, and through the restricted activities at the races, including hospitality. "

While revenue declined, the costs of Formula 1 also fell due to the shorter schedule and the reduced number of flyaway races: "Costs fell in the fourth quarter and for the full year due to lower hospitality and lower freight costs due to fewer, logistically more favorable races."

Formula 1 rejects vaccination offer from Bahrain .
The Kingdom of Bahrain offers Formula 1 to vaccinate its employees against the coronavirus. But the racing series does not want to push ahead. © Provided by sport1.de Formula 1 rejects vaccination offer from Bahrain Formula 1 has refused an offer from the Kingdom of Bahrain to vaccinate all employees in the top motorsport class on a voluntary basis against the corona virus who participated in the pre-season tests (12th to 12th) March 14th) and the opening race on March 28th.

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