[ad_1]
PARIS: Formula One’s 70th anniversary season, stalled by the coronavirus pandemic, could end in tears for teams facing financial ruin unless the sport cuts costs and achieves sustainable spending.
Alarm bells have been ringing for weeks over whether the sport can survive in its current format ahead of key talks on Thursday (April 16) between the FIA’s governing body of motorsports, Formula One chiefs and the 10 teams that participate in the circuit.
“The crisis is the last wake-up call for a sport that was not healthy and was not sustainable and had reached a point where we need drastic changes,” McLaren team principal Andreas Seidl told reporters yesterday. of the conference.
Formula One, motorsports most expensive luxury brand, has withstood financial storms before. Following the 2007-2008 crisis, manufacturers BMW, Honda, Toyota and Renault resigned. In 2009, the French Grand Prix was canceled and the Toyota-owned Fuji Circuit in Japan was withdrawn.
But Formula One cut costs and recovered.
READ: Belgian Grand Prix joins France on uncertain list
This time, the blow to sport and the global economy is more difficult and sport may be less equipped to deal with it.
Two races (Australia, Monaco) have been canceled, seven (Bahrain, China, Vietnam, the Netherlands, Spain, Azerbaijan, Canada) have been postponed and the last rounds, starting with the French Grand Prix on June 28, are in doubt.
Triple podium success for Verstappen in virtual Australian supercars
Ratings agency Moody’s downgraded Formula One, owned by US group Liberty Media, in early April, but said it felt the sport could survive a lost season.
“Formula One has strong liquidity and a cost base flexible enough to handle during a severely constrained 2020 season,” Moody’s wrote, adding that F1 “could probably support a full cancellation.”
The leadership of the sport is not ready to rule out this season.
“If we could start in early July, we could do a 19-race season,” Ross Brawn, F1 managing director, said on April 8.
Brawn said that under FIA rules “eight races is the least we can have a world championship.”
“We could get eight races starting in October. So if you wanted a standstill, it would be October.”
RETHINK
The image is different for teams.
Even those with wealthy sponsors such as Renault and Daimler (Mercedes’ parent company) could rethink their future involvement in F1.
The uncertainty increases because the commercial and government agreements for the next season are still being negotiated by the FIA, Formula One and the teams.
One problem is reducing the spending limit, which is currently $ 175 million per team.
McLaren was ready to start in Melbourne, its leaders are concerned but say the sport emerged healthier from the AFP / William WEST crisis
McLaren’s Seidl says the impact of the coronavirus pandemic remains unknown, but Formula One needs to assure its sponsors that it can withstand the blow.
“With all the financial losses we will face this year and the magnitude is still unknown because we don’t know when we will compete again, it is important that we can show our shareholders that (whatever) this year’s losses are, you can make up for it in the coming years. years “.
The spending limit “will be lowered,” FIA President Jean Todt told AFP on April 9.
“Motor racing, starting with F1, is too expensive,” he said.
“But the pandemic is making it harder to cover these costs. There is a risk of losing equipment and manufacturers.”
READ: Triple podium success for Verstappen in virtual Australian supercars
Alpha Tauri’s Franz Tost said his team would lose between $ 1.5 million and $ 2 million (between 1.35 and 1.8 million euros) per race.
When asked if he could see the teams sinking, McLaren CEO Zak Brown told the BBC: “I could see four teams disappear if this is not handled in the right way.”
He added that it could be difficult to replace any equipment that was retired
“Given the time it takes to build an F1 team, and given the economic and health crisis … to think that there would be people lined up to take over those teams as there always has been.”
“I don’t think the timing could be worse from that point of view.”
However, Seidl was optimistic that the crisis could accelerate the sports reforms his team needs.
“We have a good sport,” he said. “I hope we can get out of this crisis with Formula One in better shape.”
