On the final day of pre-season testing in Barcelona I met briefly with F1 CEO and chairman Chase Carey in the paddock. We discussed the downward spiral of F1’s share price (FWONK) – at that stage it had dropped 25% in the wake of China’s ‘postponement’ of its grand prix. Bearing a harassed expression behind his spectacular moustache Carey observed: “Markets don’t like uncertainty, and we’re a travelling sport.”
As this is written FWONK sits at 40% of its January 2020 all-time high of over $48.00, and will slip further, certainly while uncertainty prevails – an oxymoronic statement, yes, but equally a sign of the current times and of the uncharted waters ahead.
Until F1 issues a revised calendar FWONK will be continuously punished and pummelled, but how can such a calendar even be realistically considered as accurate while most countries across the world are recording ever-increasing fatality rates on an hourly basis? In the words of an F1 spokesperson, even a draft calendar is “a moving target”.
Therein lies the biggest challenge F1 commercial rights holder Liberty Media has faced since acquiring control of F1 from investment fund CVC Capital Partners – who, incidentally, now plan to squeeze the game of rugby as much as they exploited F1 – in January 2017: how to salvage the maximum number of events without being accused of insensitively profiteering, all while disrupting existing dates as little as possible.
Thus, once the season is able to restart, the imperative will be to slot in as many of ‘postponed’ dates between existing dates as logistically feasible, while maintaining existing dates where tickets are already on sale. As at end of testing there was allegedly a single event that had not accelerated its sales effort – Abu Dhabi – which is unlikely to start doing do so now. Delaying that race a week would hardly affect ticket sales.
Still, an indicator of the difficulties F1 has in postponing dates is the truculence of the Dutch Grand Prix promoter: it’s absolutely clear to even the most myopic folk that the race cannot be staged on 3 May as scheduled, yet they refuse to confirm a date change despite an F1 release – and various subsequent official statements, including a fan apology from Carey – stating racing would resume the end of May, at earliest.
It is such in-fighting between race promoters (and governments in many cases) and Liberty that caused unacceptable delays in Australia as teams, promoters, politicians and Liberty Media (in conjunction with the FIA) squabbled over who carries which money pot, and how far. In the process F1’s reputation ended up being seriously soiled, and one wonders how long it will take to rebuild trust all round.
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While F1’s sporting regulations state that the world championship needs to comprise a minimum of eight rounds, it does not, though, state that these need to be held at eight different venues or even on different weekends – thus it is theoretically possible, if highly unlikely for reasons that will become clear, that selected circuits could host double-header events on Saturday/Sundays, during the same weekend.
However, F1’s sporting regulations stipulate various provisos – including, for example, that “The final list of events is published by the FIA before 1 January each year” – and strict weekend timetables that can be waived only by unanimous agreement, which is where it gets very sticky. Should just a single team fail to agree to any changes, any plans could easily be torpedoed.
Thus, F1 needs to have all team approvals sorted before formalising and announcing any plans, or risk having dozens of very rotten eggs hurled at its face by irate fans and sponsors. Yes, following due process will be highly frustrating for all concerned – as it always is in F1 – but there are no other options.
The split team vote over racing in Australia – and abrupt about-turn by Mercedes over the Ferrari flow saga – demonstrates how fragmented they can be, even in times of external threats. However, one hears all teams were united during a vote on shifting the summer break to March and April, and increasing its duration to 21 days (from 14), both to create additional dates in August and to aid teams during a largely non-productive period.
Some teams are said to be perilously close to temporarily shutting shop due a shortage of parts or services, and one hopes this new-found unity marks a shift in attitude: fight hard on-track, but consider the greater good of the sport of it.
During the last three years Liberty has only begun scratching the surface of this one, as slow progress over the replacement Concorde Agreement proves.
Talking of which, at this point in recent seasons we have previously published F1’s revenue schedules. These are based on projected team income for 2020 but distributed on the basis of last year’s constructors championship classification, and divided into ten payments spread over the year.
However, due to the current uncertainty, Liberty is unable to project 2020 income, and thus teams still don’t know what they will earn this year. Try borrowing from a bank to tide the team over…
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Then there are purely commercial considerations: While the regulations call for eight events minimum, according to a TV broadcasting source such contracts stipulate a minimum of 15 races before Liberty needs to reimburse broadcasters for lost events. Thus, the crucial number is not eight, but almost double that – and that relates purely to TV income.
F1’s business model is simple: Promoters recover the costs of staging a race and the race hosting fees are paid to the CRH are recovered by the promoter from the “gate” and subsidies as paid by local/national authorities in return for tourism benefits generated by events. The CRH retains all other rights, and thus has four main income streams: race fees, TV contracts, “bridge and board” advertising, and high-end hospitality.
Based on this model, the chances of running “behind closed doors” events makes no sense save possibly for F1’s five so-called “propaganda races” – Abu Dhabi, Baku, Bahrain, Shanghai and Sochi – for whom the “gate” is largely insignificant. However, they would need to brace themselves to foot the entire bill, for there would be no spectator or tourism benefits to off-set. All to enable a US-listed entity to cream the income…
By the same token, weekend double-headers, with or without spectators, make little sense overall, for crucial ingredients such as tourism and gate income would not be doubled, while aggregate eyeballs would probably drop, particularly as sporting calendars are likely to be massively crowded once (if) Covid-19 recedes.
Thus, double-headers are unlikely to result in double exposure or double accommodation stays, particularly if the primary rationale is to top up Liberty’s depleting coffers and not provide income.
However, teams are acutely aware they will not derive income from F1 for as long as there are no races to contest (televise) – and those who entered into exposure- or performance-linked contracts will be particularly hard-hit – and thus they can be expected to be as flexible as possible within their own business models.
All that said, all parties, ranging from the FIA and F1 through race promoters to teams and broadcasters and many more beyond that, have a genuine need (and every imperative) to resume racing immediately after the lifting of Covid-19 restrictions enables F1 personnel to go about their usual business.
Assuming (key word) F1 is able to stick to its projected “moving target date” of the end of May, that would mean the 2020 season starts either in Monaco as per the current schedule (24 May) or Baku a fortnight later, with all other events running as per the schedule save for a finale in Abu Dhabi – which can be pushed out a week or so due to special circumstances – and others slotted into any gaps.
On that basis then the races that are directly affected are: Australia, Bahrain, Vietnam, China, Netherlands, Spain and (possibly) Monaco. Before turning to the projected schedule, let us examine their fates:
Unlikely to be slotted in at some point this year due to logistics, and build cost and disruption of (re)building a park circuit that is currently being dismantled after last weekend’s fiasco. Thus, the event, hardly the biggest earner for F1 after the costs of travel to the distant country, becomes the first real casualty of Covid-19.
All-year good weather conditions in the region plus proximity to Abu Dhabi means this event can easily be slotted into the back end of the schedule, ahead of a delayed finale.
Likely to be the second casualty: Logistics make it challenging to slot the race into the calendar, while its street circuit format presents similar obstacles to those in Melbourne. Add in hosting fees that ride on the back of China’s travel costs and there is little appetite to force a stand-alone race into a packed schedule.
In addition, notwithstanding press releases to the contrary, sources on the ground suggest that Vietnam needs another year to prepare for its inaugural event, while pre-Covid ticket demand was such that numerous grandstands were taken off sale.
Every attempt will be made to accommodate a substitute Chinese round, particularly as the circuits pays amongst the highest fees ($40m) and the world’s most populous (and world’s largest car market) has been identified as a prime growth area for the F1. Hence the event could be slotted into the back end of the calendar, but this is thought unlikely as freight costs would not be shared with Vietnam.
Still, F1 needs to be seen to be making every attempt at accommodating the race.
Being Europe-based, the event can be slotted in ahead of the Belgian Grand Prix – staged 300kms from Zandvoort – in August, during what is/was F1’s summer break. Thus, the race could fall on any of three open weekends in August.
A back-to-back with Hungary is the most likely, still providing a brief break before what will an extremely hectic period. This slot provides the longest gap to Spa’s race, crucial to reduce ticket cannibalisation between the two events.
Likely to be cancelled entirely due to political issues which arose after the current one-year race contract was signed: according to Spain’s El Confidencial publication the hosting club RACC owes €30m plus and is effectively bankrupt, while the F1 grand prix itself has never covered its hosting fee, said to be €22m in 2020. Thousands of tickets are given away to prevent embarrassingly empty stands, the publication added.
An interview promised to RaceFans during testing was cancelled after RACC chairman Vicenç Aguilera resigned unexpectedly. Thus, cancellation of the race will probably be welcomed by the Catalan government, but expect much wrangling over payment of the fee.
Could be hosted subject to Covid-19 restrictions being lifted. If not, is unlikely to be accommodated later due to the logistics of building/rebuilding the street circuit – currently in progress – plus the fact that Monaco is usually (not always) run during Ascension Day weekend to minimise disruption to traffic and business.
According to a source, the Monaco Automobile Club is adamant that this year’s race be run on the scheduled weekend, or not at all – the most likely scenario should Covid-19 prove unaccommodating even to principalities, as the race pays zero hosting fees while gradually being overtaken by others in the glamour stakes.
Thereafter the calendar will take its normal course through to Hungary, with the Dutch round slotted in ahead of Belgium and the “normal” schedule resumed through to the Brazilian Grand Prix.
Then it gets tricky: Every attempt is being made to accommodate both Bahrain and China after Sao Paulo, but weather is not at its best in Shanghai from November. However, moving Abu Dhabi out a week enables Bahrain to be accommodated, while a two-week delay permits both China and Bahrain to be accommodated, albeit extremely hectically.
Thus, the provisional calendar could look as follows:
|6||19 July||Great Britain|
|18||29 Nov/6 Dec||Bahrain|
|19||6/13 December||Abu Dhabi (likely the former date)|
How likely is such a schedule, be it 17, 18 or even 19 races? The smart money is on 19 races if Covid-19 is fully under control by May and Monaco goes ahead and 18 without, with China falling away only after every attempt is (seen to be) made to save the race. That would bring the calendar down to 17 – five down on the 22 originally scheduled, but still well up on pre-CVC era schedules.
Either way, as Lewis Hamilton said so eloquently in Melbourne – and only half-shot down by Carey in the face of F1 wriggling every which way to stage the race in the face of insurmountable odds – “cash is king”, which is evident in every option Liberty throws at F1 in desperate efforts to prop up its share price and ensure the short-term survival of teams. Long-term plans can and must wait.
A Thursday conference has been called by F1 and the FIA to discuss a draft calendar with all teams, so watch this space – but don’t expect the schedule to be firmed up just yet.
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27 comments on “Analysis: Why F1’s best-case scenario now is a 19-race 2020 season”
18th March 2020, 12:44
1. Monaco May 24
2. Azerbaijan June 7
3. Canada June 14
4. France June 28
5. Austria July 5
6. Britain July 19
7. Hungary August 2
8. Netherlands August 9
9. Belgium August 30
10. Italy September 6
11. Singapore September 20
12. Russia September 27
13. Japan October 11
14. USA October 25
15. Mexico November 1
16. Brazil November 15
17. Bahrain November 29
18. Abu Dhabi December 6
This is what I see as the most realistic alternative: The Chinese GP as a distant-to-Europe race is more or less a lost-case for this year along with the Australian and Vietnamese GPs despite being a permanent venue. Add to that, the unideal-for-F1 temperatures around the end-of-November/beginning-of-December, nor do I see how it could realistically take place seven days after the Brazilian GP given the distance and logistics involved in that. As a triple-header with the Middle-Eastern tracks, maybe. The Bahrain GP is the one with the greatest chance of getting saved for this year out of the non-European ones primarily due to its proximity to Europe, and as for the climate:
”All-year good weather” – Not, ‘all-year’ exactly. Only from November till April. The rest are unbearable in the Arabian Gulf region.
18th March 2020, 13:26
Bahrain is, however, a night race, so the day-time temperatures are not as important. Nights tend to cool to around 21 degrees in Bahrain in November.
18th March 2020, 14:41
@leonardodicappucino An evening race, and in late-November, it’d probably start at 17:10 given the sunset times of 16:45 (the earliest of the year there). Nevertheless, the daytime temps are still important, because people have to stay there throughout a day as they couldn’t jump (a form of teleportation) out of there for the midday, and afternoon-hours to avoid the sun during the hottest months of the year when the daytime temps regularly exceed 40 C.
Srdjan Mandic (@srga91)
18th March 2020, 13:41
AMus mentions a different scenario:
Should the season start later than in Azerbaijan in June, they could extend the season into next January, then start again in April with the 2021 season (already with the budget cap in place), but with the 2020 cars (all teams but Ferrari have already agreed on freezing development for chassis, gearbox and parts of the suspension – only aerodynamics would be free to develop). This would save the teams a lot of money and give them more time to prepare for the new regulations.
Dieter Rencken (@dieterrencken)
18th March 2020, 13:45
I am aware … a lot of wishful theories about…
18th March 2020, 22:26
@dieterrencken, Among those, no doubt, is my “Silverstone solution” but the only way to ensure some income (TV) on a bankable calendar is to hold the races, behind closed doors, at Silverstone until such time as the situation normalises.
18th March 2020, 14:00
I’d support, and even be excited about, a 20/21 super season.
Especially, since this is the easiest way to create cost savings for the teams whilst still maximising income for the whole circus (many races).
Pironi the Provocateur (@pironitheprovocateur)
18th March 2020, 14:47
That doesn’t make any sense to me, a season with a year-old cars hardly brings any excitement and heavy sums were already spent on the development from 2021. It isn’t good for the fans either. I hope this one stays in the realm of crazy theories.
Srdjan Mandic (@srga91)
18th March 2020, 15:18
It is the only solution, if we are to lose even more races this season. Teams, especially the smaller ones, will lose a huge amount of money because of the cancelled races. We might lose those smaller teams by the time the new regulations come in.
The investments for the 2021 cars won’t get simply lost, if F1 postpones them for one year. Plus the budget cap will be already in place.
Yes, 2021 might result in a boring season. But if the alternative is losing teams, it’s a small price to pay.
Pironi the Provocateur (@pironitheprovocateur)
18th March 2020, 15:51
If we give the big teams an extra year to outspend the smaller ones (because let’s not pretend, they will always find the ways how to spend more than the budget cap), the 2022 cars will roll out and the gap will be twice if not thrice that big than it would be without the delay. It would keep those with financial problems for a year or two more in the sport but it would eventually drive them out otherwise. This wouldn’t be a good solution.
18th March 2020, 17:06
The AMuS article (or at least the account of one of their journalists) suggests that the budget cap will start for next year @pironitheprovocateur, which would somewhat negate your objection – I do think maybe @dieterrencken sees some of that wishful theorising there though as I can easily see big teams argue against anything but status quo be reserved, but I suppose we’ll learn more over time, and perhaps even before F1 eventually resumes.
Well written and thought through article, good read; let’s hope that tomorrow F1 will give similar clarity!
18th March 2020, 14:47
@srga91 I have doubts about those.
18th March 2020, 18:28
I think a lot of contracts (sponsorship, etc.) in F1 run from January to December. Extending the season beyond this could be very difficult
18th March 2020, 13:55
Do the hosting fees really need to be high? Do we have to charge $40m to hold the race in China?
18th March 2020, 14:13
As Dieter so eloquently phrased it, China is one of the “five so-called “propaganda races” – Abu Dhabi, Baku, Bahrain, Shanghai and Sochi”, where the promoters are willing to pay the hosting fees for the benefits of sportswashing. It’s quite different from a democratic government paying it out of public funds (e.g. Australia).
19th March 2020, 5:59
I thought Hungary was also one of the propaganda races, with it being the 1st race to be held behind Iron Curtain.
MEGATRON M12 (@megatron)
18th March 2020, 16:54
Yes, it costs alot to ship all.thar stuff to China. And they dont make much money from Monaco.
Forrest Gump (@forrestgump)
18th March 2020, 14:52
According to this mornings news, tRump just tweeted:
We will be, by mutual consent, temporarily closing our Northern Border with Canada to non-essential traffic. Trade will not be affected. Details to follow!
18th March 2020, 15:06
Monaco in may seems impossible. Even in the optimistic vision, things will take time to get better and may seems too close. If (and is a big if), in Canada the virus will not spread in a significant way during the next weeks, I guess Montreal will be the first grand prix. We have to consider that Great Britain, where most of the team are based, is three weeks ahead of Italy, and, if the chinese scheme is replicated, three months is the time before everything come back to normality. So, we hope, end of may in Italy and from one to three weeks later in the rest of Europe.
18th March 2020, 15:30
A lot of it remains uncertain off course, especially with how this will develop during the next few months.
I think the 17 race calendar might be possible – losing Australia, losing Vietnam and losing China as well as Monaco
– I’ve seen reports about the supplier/builders of the grandstand not being able to deliver since they are largely from Italy, and anyway, I doubt that the situation will have calmed down again in Monaco, southern France AND italy by then to allow relatively normal travel of such large amounts of people – remember, most people who visit Monaco travel through Nice and sleep in France as well, something almost impossible with any lockdowns in place.
I must say that I am also sceptical about Sochi – Russia seems to be ignoring and hiding their numbers, could be big, might be risky to travel there. In the USA – who knows how things develop, so far it might not even have the worst behind it come September. The same could be true for the UK.
I guess we all hope that come September the Italians will be ready to embrace a festival of speed and hope to see their national pride win the Monza race, so far, it might well be that even by then there will be restrictions on movement.
Alianora La Canta (@alianora-la-canta)
18th March 2020, 22:17
It’s a difficult one, because divergent strategies to COVID-19 means we’re likely to get a flare-up later on this year, after everything has started running again in some places. Given that one of the outliers is the UK, that means we could well lose more races even if things start up again on May 3 as optimistically hoped. Rescheduling a race is no guarantee of it happening, any more than races currently scheduled will necessarily run. There is, however, no way to guess when the second outbreak happens – it could be as late as 2020/2021 winter season, in which case F1 will be able to handle this without too many issues.
I wonder if China could share freight costs with Japan? The Russia-China-Japan triple-header would be awful for teams, but I don’t think F1 team staff needs are going to gain priority over cash in Liberty’s eyes. It would make it easier for the Chinese to fund their race and that market gets some sort of security. Or else China could still share with Vietnam, but have them in the 22/29 November slots (with Abu Dhabi on 13 December).
I assume Zandvoort will not announce a reschedule until they a) know when they’re rescheduled to or b) get so close to the race date that they’re forced to give an open date for re-booking. I could see a triple-header being set up for France-Netherlands-Austria, or indeed Austria-Netherlands-Britain, as an alternative to Netherlands-Belgium. I’d be particularly inclined to consider the latter, given the risk of a lockdown occurring in Britain while the teams are out at another race (in that plan, it would allow the maximum amount of racing to be done before it becomes critical from a logistics perspective for lockdown to be lifted – assuming the teams get to Austria with a double-header’s worth of equipment). I can’t help but wonder if Liberty is hoping for a quick resolution of COVID-19 in case they can then implement one of those two triple-header strategies. Then, potentially, there’s an extra slot for a different race, or else the possibility of preserving the originally-intended three-week August break (which might be an incentive for teams to be flexible elsewhere in the calendar).
Bahrain could be done on the way to or from another Asian race, due to its proximity to common connecting flight points. However, it could not work if it was before or after a triple-header, unless Liberty wishes to present a quadruple-header (which even team bosses are likely to baulk at, given they’re flyaways). Also, of the remaining non-Zandvoort races, it’s probably the most feasible to park into the August break (I don’t like that it’s being considered for filling with a race, but Liberty being a a financial monarchy…), perhaps with a discount if Liberty is marginal on hitting the 15-race minim otherwise.
Spain and Monaco, Dieter is right about those races.
Apparently some people have had trouble getting visas for Azerbaijan. Of course, if the pandemic is under control in a month or six weeks’ time, that won’t be a problem. However, I could see a point where cancellation could be forced upon Baku before the go/no-go date for Monaco, because visas have a lead time to be processed…
Of course, there is the issue that not all of these swaparounds can be accommodated on the same calendar (at least, not without mutiny kicking in at some point). However, Spain is the only definite future loss (and even it might get lucky given that it’s 6 weeks away…)
Alianora La Canta (@alianora-la-canta)
18th March 2020, 22:30
Caveat: I have not looked at the calendars for each of these tracks to check for clashes, climate reports (which could nix the Bahrain summer break plan) or much of anything else that could interfere with the dates in practise. Dieter will have done more research on his plan than me.
18th March 2020, 22:59
I wish I shared the optimism I see about. f1 is such a truly global endeavor, I just don’t see it being able to organize races anytime soon.
China seems to have found a mitigation for Cornovirus, but it is travel and gathering restrictions completely hostile to F1. Look at Italy, will Ferrari be able to assemble a race team in May?
I suggest if 8 races can be salvaged it will be wonderful. I sure hope I’m wrong.
Xavier Rodrigues (@thexrod)
19th March 2020, 2:41
I love the phrase “propaganda races.”
19th March 2020, 6:52
I think F1 needs to get a grip on reality. I think some of the teams are, particularly the ones based in Italy and McLaren. And I’d chuck Renault in the mix, the way things are going there, too.
It’s taken three months for China to stop having new cases. There won’t be any F1 in May, with Baku being the earliest start. It’s a long way away, but Monza won’t happen, it’s in the heart of Northern Italy and that place is in tatters right now. Sport is not at the forefront of peoples’ minds.
Melbourne, Vietnam, Spain and Monza will all be gone. Bahrain should be ok in the long run. I’d chuck Silverstone in that category now, considering how bad a job Boris and co are doing. I’d be surprised if there’s any more than 15. Hey, who knows, but let’s be realistic.
Pironi the Provocateur (@pironitheprovocateur)
19th March 2020, 7:22
China shouldn’t have a race this year just because of what they caused.
19th March 2020, 8:22
That is a bit harsh your talking like they intented to get sick. I am afraid these things can happen anywhere like a mutation of the normal flu and the same things happen.
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