Formula 1 recorded a drop in second-quarter revenue of over 96% in 2020, as the first major impact of no races in the first half of the year was revealed.
The coronavirus pandemic forced the start of the 2020 season to be cancelled on the eve of the opening weekend in Australia, and no grands prix were held until the championship finally began at the start of July.
Revenue was already down in Q1 compared to 2019 without the usual Australian and Bahrain races in March.
But it plummeted from $620m in the second quarter of 2019 to just $24m this year, when eight grands prix scheduled to take place during Q2 were either cancelled or postponed.
F1 has not accounted for any race-hosting or broadcasting fees and is without any additional income from on-site ventures like the VIP Paddock Club.
Seven races were held during Q2 last year.
F1’s $24m revenue despite holding no events is put down to the “elements of sponsorship contracts associated with non-race related rights”.
Expenditure did not include team payments because they are normally recognised on a pro-rata basis as races take place.
It was also lower because of the lack of costs usually associated with holding races, plus the F1 organisation implemented cost-cutting measures including salary reductions, lower bonuses, and the utilisation of the UK government-supported furlough scheme for around 50% of its employees throughout Q2.
The third financial quarter will be an interesting point of comparison as it will feature 10 races thanks to F1’s bumper schedule in its bid to carry out a revised 2020 season.
Expenditure will therefore increase to more normal levels while revenue will be a curious test case.
Last year there were only seven grands prix in this spell, but all 10 races in 2020 may eventually be held without fans and the usual hosting fees that accompany normal events.
F1 is still evaluating plans for a reduced number of fans to safely return to certain races in some capacity in 2020, with Russia and Portugal aiming for spectators.
“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,” said Chase Carey, F1 chairman and CEO.
“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 are thankful to the FIA, teams, promoters, our employees and other key partners that made this return to racing possible.”
