In order to promote financial stability, some Formula 1 teams have already received advanced payments, says Liberty Media President and CEO Greg Maffei.
MotoGP announced earlier that independent teams will receive advanced payments during the month of April, May and June in order to guarantee the economic well-being.
Formula 1 has a unique financial model. Each team receives prize money that is based on their position in the Constructors Championship from the previous season and on the sport’s profit with certain outfits also enjoying some guaranteed fees. While the latter squads are entitled to receive their fixed income despite the ongoing crisis, the majority of teams are not getting any money because of the delayed season.
Maffei disclosed that the sport’s Commercial Right Holder has already advanced payments for teams in order to make sure that F1’s outfits survive the unprecedented situation that has placed an enormous financial burden on them.
"We have advanced money in advance of team payments for certain teams already. There are cases where we may do more of that. There are other things that we might do to bridge teams that might need help. We're certainly not viewing this as an open chequebook. We want to make sure that teams are solvent because they are part of what we need to race successfully in 2020, 2021, and beyond,” he is quoted as saying by Wall Street analysts.
The American businessman stressed that Liberty Media has worked out plans for different scenarios as there is still unclear how sports events can return this year. F1 has been considering races behind closed doors that would mean that the Commercial Rights Holder would need to forgo the traditional host fees from promoters as they generate the majority of their income from ticket sales.
In the case of ‘ghost races’, Liberty Media is prepared to accept lower income from events with the possibility that “we'll obviously have lower profitability, maybe even no profitability.”
"There's a degree that we're running profitable or not profitable races, but they still need to incur all their costs of running their terms. It's a challenge. How do we do something that is beneficial for fans, but also doesn't have the teams bankrupting themselves by conducted no profit, or loss, races?
World Motor Sport Council approves measures to allow the FIA to make swift regulatory changes by majority under exceptional circumstances.https://t.co/vJZFyLr0d7— FIA (@fia) April 24, 2020
FIA updates the ISC
Formula 1’s regulatory body, the FIA announced on Friday that it has added a safeguard clause to its international sporting code.
The governing body introduced earlier changes to allow quicker technical and sporting changes amid the ongoing coronavirus crisis. The previous moves made it possible for the respective race organisers to make changes to the race calendar in the continuously changing situation caused by the COVID-19 coronavirus outbreak.
The latest alterations to the international sporting code will allow regulation changes without the need of unanimous agreement between all competitors, requiring only a majority backing.
“However, in exceptional circumstances, and if the FIA considers that the change in question is essential for the safeguarding of the Championship, cup, trophy, challenge or series concerned, the agreement of the majority of the Competitors properly entered shall suffice,” reads the update.
While Formula 1 unanimously voted for the delay of the 2021 technical regulation overhaul and the retention of the 2020 cars for next year, the controversial cost cap, originally set at $175m, is still being discussed.
While independent teams are arguing for lowering the budget cap even further for 2021, the sport’s top three outfits, Ferrari, Red Bull and Mercedes refuse to yield. The new clause could stop the top teams to block a drastically low budget limit.