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F1 stock loses $2.6 billion in value - is F1 treating the coronavirus pandemic seriously?

F1 stock loses $2.6 billion in value - is F1 treating the coronavirus pandemic seriously?



F1 stock loses $2.6 billion in value - is F1 treating the coronavirus pandemic seriously?

F1 stock loses $2.6 billion in value - is F1 treating the coronavirus pandemic seriously?

MotoGP have postponed four Grand Prix. Formula E have postponed three. The Rugby Union Six Nations competition is in tatters and football leagues across Europe may remain incomplete. But Formula One carries on in Melbourne, which begs the question - are they taking the coronavirus situation seriously enough?

While some insisted that the media hysteria surrounding the coronavirus outbreak misrepresented the scale of the situation, those claims can now be put to bed after the World Health Organisation classified the outbreak as a pandemic - this meaning that the virus is 'prevalent over a whole country or the world'.

On Sunday 8 March, Northern Italy was put in lockdown, with travel in or out of the region prohibited. That included the Ferrari headquarters in Modena and Maranello, yet Ferrari were still able to travel to Australia on Monday, 9 March.

Since this date, Italy has been put on complete lockdown and Australia has added the country to a travel ban - others already affected including China, Iran and South Korea.

At the time of writing, Australia has a recorded number of 122 cases of coronavirus and three members of Formula One personnel are in self isolation after showing symptoms. Test results are expected within the next 24 hours.

The reaction from Formula One to the possible cases within the paddock and those in the wider world has been to simply to cancel the autograph sessions and limit contact between drivers and the public.

Bahrain race officials made the decision to run the second race of the season behind closed doors. The decision was not taken by Liberty Media or the FIA. Conversely, after China put a travel ban in place, Formula One was left with no choice but to postpone the race.

Concerns have surrounded the Vietnam Grand Prix since the outbreak began in China, the two countries sharing a border, but the fans keep being told that the race will go ahead as planned. While Vietnam largely has the situation under control, the country have suspended visas for British citizens after 13 passengers tested positive for coronavirus on arrival from London.

Leaked messages also suggest that the postponement of the race may be taken out of the hands of Formula One officials. The Formula One Group (FWONK) share price has tumbled in recent days and was trading at as little as $28.23 on Wednesday having opened at $30.96.

This drop wiped an estimated $600 million from the value of the sport, taking the total loss to $2.6 billion since hitting a high in January.

Should Formula One cancel or postpone more races, refunds may need to be made to race promoters, sponsors, broadcast partners and potentially compensation to teams.

Logically, more races should have been postponed, but could the share price survive another similar drop and, if Formula One could not survive this, how could Formula E and MotoGP?

The expenses for the above championships are far lower than Formula One. Formula E costs are a fraction of those involved in competing in F1 due to teams not having the development costs on their chassis, and while MotoGP teams do have this expense, the money involved is still minuscule compared to F1.

A factory MotoGP bike cost in the region of $3.5 million to rent for a season. In comparison, it was calculated that the cost of a 2018 Formula One car, without development or any other costs attached, stood at $15.5 million.

With this level of investment, postponing a race as a precaution of something that might happen is not on the agenda of Formula One or Liberty Media.

At present, large-scale gatherings - those of over 1,000 people - have been banned in Austria, Italy, France and Spain, bans that will remain in place until at least the end of March.

With Formula One due to return to Spain at the beginning of May, Liberty Media and Formula One will be hoping that Europe can have a handle on the pandemic, otherwise further damaging postponements could be forthcoming.

Remove money from the equation and Formula One would be treating the situation with the same view as the International Olympic Committee or UEFA, both of whom are considering the postponement of flagship events the Olympic Games and the European Cup.

Sadly, money rules and, while - as fans of the sport - we all want to see wall to wall racing, Formula One stands almost alone as a sport willing to put money ahead of the health of both participants and spectators alike.

It is unclear how the test results of those three personnel, two from Haas and one from McLaren, will affect the coming weekend in Australia, but the likelihood is that the show will go on.

The question originally posed here was, Is Formula One treating the coronavirus pandemic seriously enough? Put simply, no, in which case, the followup question must be asked - why? The answer to this question is as simple as the original one - money.


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