Formula One could collapse

[coaster]

Yes, Cart had it all and they killed it off, it was a tug of war for track rights or somthing? All business models would have a break even and profitable scenarios and break even would be the case for now.
F1 the company will survive, but of the teams may a different story, maybe a smaller grid yet again, time will tell.

Edit, Britain 2030 is the 'headlight approaching in the train tunnel'.

[fritticaldi]

F1 announced yesterday losses of 386 million.

[aMessageToCharlie]

Looks like at least one user itt is having some humble pie for lunch today then

[FrukostScones]

F1 announced yesterday losses of 386 million.

I will send them a cuddly toy for comfort.

[jjn9128]

F1 announced yesterday losses of 386 million.

And in their infinite benevolence handed the loss in it's entirety directly to the teams.

[Zynerji]

Teams sharing data and designs would still allow high levels of airbending-engineering, but would level then playing field on spending.

[Ringleheim]

F1 has never been in a weaker, more vulnerable position in my opinion.

It's not just COVID. It's a lot of things.

F1 went in the wrong direction with the technical regs; the current formula (and beyond) is too technical.

F1 was very healthy when there was so much participation, they had to do pre-qualifying before qualifying.

Those days are long gone.

[Ringleheim]

We are all going through uncertain times. This global pandemic hasnt spared anyone. The top level of motorsports , Formula One is no exception. Without revenue ( the races have no fans) How much longer can the sport survive? Any thoughts?

I think it’s time for you to look a bit deeper into the economics of teams, races and maybe in general.

So, as a first step, find out where F1, the FIA and Liberty take the majority of their income. Small spoiler, it’s not the spectators in the stands.

I think in your smugness, you missed the news about the $386 million loss last year.

[Jolle]

We are all going through uncertain times. This global pandemic hasnt spared anyone. The top level of motorsports , Formula One is no exception. Without revenue ( the races have no fans) How much longer can the sport survive? Any thoughts?

I think it’s time for you to look a bit deeper into the economics of teams, races and maybe in general.

So, as a first step, find out where F1, the FIA and Liberty take the majority of their income. Small spoiler, it’s not the spectators in the stands.

I think in your smugness, you missed the news about the $386 million loss last year.

Maybe it's good to investigate where his loss came from. It's not a loss in revenue (the loss from promotors is balanced quite well against the rise in income from broadcasting).

It's the one time payment to the teams as a signing bonus for the new Concorde agreement. It's booked in a single year, but the contract is over several.

With the return of more regular promoters for 2022, revenue should shoot up again.

[subcritical71]

F1 announced yesterday losses of 386 million.

Here is my two cents....

Very few would argue that the pandemic has been a boon for their business, especially sporting franchises. The affects first hit F1 in the 1st quarter but as the year has gone they have slowly found their way with a larger revenue in Q4 2020 then in Q4 2019. It's interesting that the headlines show a big negative for the year. While the number is true it neglects to show the full year and the progress made. In March it looked like the whole season would just be cancelled and F1 have been recovering nicely. Additionally, the total revenue for the second half of 2020 was on par with 2019 second half, so I don't see F1 collapsing anytime soon. The key is how their operations adjust to the new norm.

Operating Income
1Q20 $137M (loss)
2Q20 $122M (loss)
3Q20 $104M (loss)
4Q20 $23M (loss)

Revenue
1Q. 2019 - $198M, 2020 - $13M
2Q. 2019 - $531M, 2020 - $12M
3Q. 2019 - $553M, 2020 - $524M
4Q. 2019 - $382M, 2020 - $415M

[NL_Fer]

With the budget cap in place for teams. Do they receive lower price money?

[Jolle]

With the budget cap in place for teams. Do they receive lower price money?

Prize money stays the same but all other income is not disclosed and part of the concord agreement. But Liberty themselves stated that the 2020 loss is primarily the signing bonus of the new contract.
The primary idea behind the cost cap is making F1 more interesting for investors (mainly for the teams). F1 isn’t a bottomless well anymore whenever PMI or Daimler decide to raise their budget.