F1 in Covid-19 slipstream
Race chiefs, team bosses face handing back money to broadcasters, partners and sponsors
F1 is set to feel a heavy financial hit due to the impact of the coronavirus pandemic on the 2020 season. That is according to Sportcal, who say the rise of esports cannot make up for a shortened season which might see broadcasters, partners and sponsors demand a huge chunk of their cash back.
F1 chiefs are currently wrangling with how to salvage as many races as possible with eight wiped off the calendar already due to the pandemic.
The Australian, Chinese and Monaco Grands Prix have all been cancelled, while the Bahrain, Vietnam, Dutch, Spanish and Azerbaijan meets have been postponed.
F1 chief executive
Chase Carey revealed on Tuesday that he is optimistic about the chances of the 2020 campaign being made up of 15-18 races.
That will be facilitated by placing Grands
Prix on the weekends freed up by moving the annual shutdown forward from August to March and April, running two-day race weekends and extending the season beyond the current Nov 29 end date.
F1 last week announced the F1 Esports Virtual Grand Prix will be used to compensate for the races which have been lost to the pandemic and the simulator meets will be broadcast live on Sky Sports F1.
There have also been rival online series set up by the likes of Veloce Esports and The Race.
However, Conrad Wiacek, head of analysis and consulting at Sportcal, a GlobalData company, has warned esports cannot make up for a shortened season.
Wiacek says that as well as losing out on race fees, F1 chiefs and team bosses face having to hand back money to broadcasters, partners and sponsors – some of whom may pull out of motorsport altogether.
“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,“Wiacek said.
“The UK deal with Sky TV is worth US$1.4 billion (RM6b) 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 US$272 million (RM1.15b) as partners of the series, and a further US$972 million (RM4.2b) 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.” – Express Newspapers