Formula One Group has reported an 84% drop in revenue during the first quarter of 2020 amid the ongoing coronavirus crisis.
No grands prix have occurred so far this year, with the season not set to get underway until the beginning of July.
Due to the lack of racing, the sport's income dropped from $246 million during the opening three months in 2019 to $36 million during the same period in 2020, Liberty Media's Q1 financial report shows.
From that income stems the 'Primary Revenue' which includes payments from areas such as race venues and sponsorships. It brought in $198 million during the first quarter in 2019. In 2020, Liberty Media has recorded an income of $13 million - a drop of 93%.
“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 recognized during the period, and no race promotion fees nor broadcasting fees were recognized.
“Similarly, other F1 revenue decreased due to zero revenue recognized 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.”
Liberty Media added that it is “currently unknown at what point fans will be permitted to attend”.
The opening handful of races will be held behind closed doors, with Silverstone insisting that any British Grand Prix in 2020, regardless of its date, will have no fans in attendance.
Speaking about team payments, Liberty Media said: “There was no team payment expense recorded since such payments are recognized 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.
“Selling, general and administrative decreased due to lower expenditures for discretionary items such as marketing and lower personnel costs, partially offset by the effects of foreign exchange related losses.
Liberty Media expects the cost-cutting measures that have been implemented over the last number of weeks to have an impact on the second-quarter report.
“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.”
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