Formula 1 teams have received advance payments in order to protect the sport’s “ecosystem” amid the uncertainty brought on by the pandemic.
F1’s overall income has taken a hit due to the loss of races this season, which in turn has affected the teams pay.
Top teams are guaranteed some fees under deals negotiated before the Liberty Media takeover, however those further down the grid rely on a share of F1’s profitability.
Speaking with Motorsport.com, Liberty Media presidenet and CEO Greg Maffei says that advance payments have been made to help teams get through the crisis.
“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.”
Maffei also stated that races held behind closed doors would not 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.”
Source: Motorsport.com
