Formula 1 revenues drop by whopping 96% in 2020, record $136 million in losses

Sports around the world have been hit hard by the coronavirus pandemic. With fans not allowed at venues, teams and event organizers have had to suffer heavy losses with no ticket revenue coming in. One such sport has been Formula 1 with F1 revenue suffering massively due to the altered race calendar. A latest F1 financial report released by Liberty Media paints a similar picture, indicating how the coronavirus pandemic has impacted Formula 1's finances.

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Formula 1 revenue crashes by 96% according to Liberty Media report

The F1 financial report was released by Liberty Media, the US group controlled by billionaire John Malone which acquired Formula 1 in 2016. The F1 financial report for Q2 was released this week, with the financials indicating that revenue from the sport had reduced by 96% year-on-year. Due to the COVID-19 pandemic, the Formula 1 season was suspended with no races taking place during April, May and June. Last year, the same three-month period saw as many as seven races.

F1 revenue plummeted to $24m in Q2 2020, down from $620 million in the same quarter of 2019. The fall in F1 revenue resulted in a massive overall loss with Formula 1 posting a $136 million loss in 2020, as compared to a $14m profit in Q2 2019. Overall, the coronavirus pandemic caused F1 revenue to drop by just under $600 million.

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F1 revenue breakup for Q2 2020

F1 revenue is divided into ‘primary revenues’ and ‘other revenues’. While primary F1 revenue includes money from race promotion fees, broadcast fees, advertising and sponsorship fees, secondary Formula 1 revenue comprises of hospitality and other event-based and television production activities. In the absence of races and subsequently fans, these figures reported a drop as well. The primary revenue figures reduced to $12m in Q2 2020, versus $531m in Q2 2019, while 'other' F1 revenue fell to $12m in 2020 from $89m in 2019.

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F1 TV ratings on the rise

With fans not allowed to attend Formula 1 races, the latest F1 TV ratings and figures have shown a slight increase in viewership. According to Sports Media Watch, the British Grand Prix averaged a 0.47 rating and 736,000 viewers on ESPN, making it the largest audience for the race since it last aired on broadcast television in 2012. Several other broadcasters reported an improvement in viewership as well. Sports Pro Media disclosed that Formula 1’s UK viewership for live races and highlights touched 13.63 million during the first three races of the 2020 calendar.

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The contraction in F1 revenue has also impacted drivers and teams. Championship leader Lewis Hamilton recently talked about how the financial situation has prompted him to delay discussions on a new contract. Lewis Hamilton admitted that while he wants to continue with Mercedes, he feels this is not the right time to discuss numbers regarding a new contract, especially at a time when others are losing their jobs.

Image Courtesy: Instagram/F1