The true effect of the global health crisis on Formula 1 is beginning to show after a huge drop in revenue was published in the Q1 results report.
The latest figures cover up until to the postponement of the Bahrain Grand Prix, which was supposed to be the second race on a record-breaking 22-race calendar in 2020.
Liberty Media’s income for the same period in January to April 2019 was $246m, but the Q1 figure for this year reads just $39m.
Primary revenue from the likes of race host fees, sponsorship deals and broadcasting money is down from $139m to $13m and other revenue streams have also dried up from $48m to $26m.
Liberty Media stated: “Since there were no events held during the first quarter of 2020, primary F1 revenue consisted only of the elements of sponsorship contracts associated with non-race related rights that were recognised during the period, and no race promotion fees nor broadcasting fees were recognised.
“Similarly, other F1 revenue decreased due to zero revenue recognised from the Paddock Club and other event-based activities and television production activities. We currently expect no races to take place in the second quarter of 2020.
“There was no team payment expense recorded since such payments are recognised on a pro-rata basis across races on the calendar. Other cost of F1 revenue is largely variable in nature and relates directly to revenue opportunities.
“These costs decreased primarily due to no races taking place and the deferral of non-critical expenses. Certain costs were incurred during the first quarter in anticipation of the start of the 2020 race season, including freight, travel and technical costs relating to the Australian Grand Prix, which was cancelled on the eve of the event.”
“F1 implemented certain cost cutting measures, including salary reductions and UK government-supported furloughs affecting approximately 50% of its employee base, effective April 3, 2020, which did not impact first quarter results but will impact the second quarter.”
As a result, Formula 1 was able to reduce its operating costs in the first quarter from $52m to $43m.