F1 scrambles to limit financial hit after China GP is called off
Formula One is working furiously to limit its financial exposure after the postponement of April’s Chinese Grand Prix, in response to the coronavirus crisis, threw this year’s schedule into disarray.
The commercial repercussions of yesterday’s decision are huge, with China paying an estimated £30million to host a race that now looks highly unlikely to happen this year. But it is the local organisers, rather than F1 rights-holders Liberty Media, who will take the greatest hit.
The announcement to postpone the race in Shanghai on April 19 was carefully worded, with Liberty making clear that the decision had been at the instigation of the Chinese promoter, Juss Sports Group, which will prove crucial in protecting F1 against the financial fallout
Calling off the grand prix still creates a headache for Liberty: broadcast contracts, for example, for 2020 were negotiated on the basis that there would be 22 races, not 21. As such, F1 will try to find China an alternate spot on the calendar.
The sheer scale of the emergency in China, where there have been almost 45,000 cases of coronavirus and more than 1,000 deaths, made it impossible for the race to go ahead as planned. It was a reckoning reached with reluctance. Only last week, Ross Brawn, F1’s technical chief, was talking up China as an “enthusiastic, growing market”.
Circumstances forced F1’s hand, with the spread of the virus out of control and several major airlines cancelling routes between Europe and China until April at the earliest.
The FIA, the sport’s global governing body, said in a statement: “As a result of health concerns, and with the World Health Organisation declaring the coronavirus a global emergency, the FIA and F1 have taken these measures in order to ensure the health and safety of the travelling staff, championship participants and fans.”
Attention now turns to accommodating China elsewhere on the calendar. To limit its own liabilities, F1 needs to find a solution this year, or at least be seen to be doing so. A race has not been cancelled since the 2011 Bahrain GP, during the Arab Spring. But all options are either inelegant or unworkable. The idea of swapping China with the Russian Grand Prix in September has already been scotched by officials in Sochi. Extending the season to give Shanghai a December date is a non-starter, too, given that Abu Dhabi pays a huge premium to ensure that its race is the final round.
Shortening the summer break to fit China into August is likewise unfeasible, since a four-week midseason hiatus is enshrined in the regulations. The only remote possibility would be to shoehorn China between Brazil and Abu Dhabi for a year-ending “triple-header”. But such a schedule would represent a logistical nightmare.
The status of Vietnam’s first-ever race on April 5 is also precarious. Although there have been only 15 cases of coronavirus reported in the country, the street circuit in Hanoi is just 200 miles from the Chinese border. The Vietnam government has banned all national and international sports in the country for the next month at least. Despite this, a spokesman for the grand prix said last night that race preparations remained unaffected.