The racing series has had to delay the start to its season
Formula One could be facing trouble with its broadcast and sponsorship incomes due to the effects of the coronavirus lockdowns.
The racing series has had to delay the start to its season until at least June, with the iconic Monaco Grand Prix outright cancelling its race this year.
This could have a knock-on effect with sponsorship and broadcast rights, both of which are supplied by companies that will also be hit by measures to contain covid-19.
Conrad Wiacek, head of analysis and consulting at Sportcal, said of the possibilities: “With multi-million dollar media rights partnerships in place, there is a prospect of greater financial damage on the horizon if sponsors pull back on their commitments.”
“The UK deal with Sky is worth $1.4bn (£1.16bn) alone, according to the GlobalData Sportcal Intelligence Centre. Should races be officially cancelled, it is not difficult to envisage broadcasters looking to recoup some of the revenue they have spent on rights fees in the short term, arguing that fees should reflect the final calendar delivery.”
“There will also be a downstream impact on sponsorship. With F1 partners committing $272m (£225.9m) as partners of the series, and a further $972m (£808.9m) committed to team sponsorships, the lack of any on-track action could see sponsors looking to terminate partnerships early – especially for those in sectors currently facing the brunt of the financial fallout from covid-19 as they look to drastically cut costs and keep their businesses afloat.”
“While the digital esports series could be an alternative means of fulfilling contractual obligations, this will only be a short-term solution for a series that is facing declining global audiences.”
This could be dire news for Formula One, which is currently trying to reconfigure its calendar for the year. With no current end date to end measures to slow the coronavirus, it is unknown how the governing body will organise its plan.