Formula 1 revenue drops by almost $600m in second quarter
Formula 1 owners Liberty Media has revealed the startling cost of the Covid-19 pandemic in its second quarterly report of 2020.
The headline figures do not make for pleasant reading for F1 CEO Chase Carey or Liberty Media although these must be taken with a pinch of salt, as while seven races took place in the second quarter of 2019, no racing took place in the same period in '20.
Even allowing for this, the numbers sting, with quarterly revenue down from $620million in '19, to $24m in '20, and while costs are down, the overall operating income dropped from a $26m profit to $122m loss.
This is a change of negative 569 per cent.
Carey is quoted in the report as saying: "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.
"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."
He added: "We are thankful to the FIA, teams, promoters, our employees and other key partners that made this return to racing possible."
With no races held during the quarter, the report states "revenue recognition was limited, with recognized primary F1 revenue in the period consisting only of the elements of sponsorship contracts associated with non-race related rights."
The report does not recognise race promotion nor any broadcasting fees for races that did not take place.
It is acknowledged that the lack of racing resulted in a decrease in costs, and that losses were further eased making taking advantage of the UK government furlough scheme.
The vast majority of the 2020 season will be run in the third quarter of the financial year, but with fans yet to return to the track, there could yet be worse news to come with ticket sales, merchandise and other ancillary revenue streams yielding minimal income while costs rise to close to normal levels.
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