To illustrate to what extent Covid-19 has ravaged the Formula 1 calendar, consider the following: At this stage in a normal season the sport’s administrators would be finalising dates and venues for next season’s schedule. Instead they are still sorting the closing legs of this year’s truncated championship.2020 F1 calendar currently comprises 13 confirmed rounds. The sport’s commercial rights holder Liberty Media still harbours hope for at least 16 grands prix before Christmas and is on target to hit that figure.
To put the numbers in perspective, recall that at one point various pessimists feared F1 would be forced to cancel its entire 2020 championship – a sad way for its 70th birthday to pass. Among the doomsayers was former FIA president Max Mosley, who argued the season should be cancelled.
Doing so would mean “the teams and the race organisers would have certainty so they can plan and take measures,” the oft-controversial Mosley opined in late April. “By waiting, you risk making things worse without having the certainty of winning anything. There’s no guarantee that the races can start again in July and it actually seems increasingly unlikely.”
While Mosley was correct in his premise that there are “no guarantees”, through meticulous planning F1 was able to ensure that it could exploit whatever opportunities presented themselves as and when they did arise. Thus not only did the sport pounce, but became the first global sport to stage an event, albeit behind closed doors.
Imagine, the alternate scenario, one in which F1 vacillated lethargically and ended up ill-prepared. It would be no exaggeration to state that more than a few teams would be in worse straits than they already are, as would be their staff and suppliers. Equally, more than a few sponsors would have baulked at invoices, while TV and associated contracts would have been in dire danger of lapsing.
Instead some teams have been spared possible bankruptcy, thousands of jobs have been saved and millions of fans have been able to partake in their passion again – all through preparedness. The key to recovery lay in the staging of Closed Events as originally proposed here, combined with back-to-back events at the same circuit where feasible. TV and sponsors contracts – trackside and on-car – were honoured, certainly in part.
The word in promoters’ circles is that Liberty drove hard bargains in the process, playing off potential venues against each other until the best possible terms were realised. For example, Silverstone was pitched against Hockenheim until its fees dropped to reasonable levels; later the German venue was pitched against bitter rival Nuerburgring and lost again. Imola and Mugello squared off, yet both were rewarded with dates.
Teams can now rely on sponsor and F1 income for the year, with most expecting to bank around 60% of pre-season projections. However, lower 2021 operating expenses due to the double whammy of the incoming budget cap and retention of 2020 cars with only marginal development permitted provide partial recompense. Ultimately, F1 and its teams are surely in a better place than would have been the case without events.
The net result is that the FWONK share price, having plunged to an all-time low of $20 in March, now hovers above $35. True, that is still a far cry from the share’s pre-Covid levels of close to $50, but who would have bet on a 60% recovery in four months given the ‘unprecedented circumstances’ or ‘the fluidity of the situation’, as F1 regularly refers to the hiatus forced upon it by Covid-19.
From a sporting perspective the most heartening developments – particularly for fans starved of action since pre-season testing in early March – are the F1 debuts of two circuits. Both, Mugello in Tuscany and Autodromo do Algarve in Portimao previously hosted tests, while the latter has long hankered for a full-on grand prix.
Such is their enthusiasm that both can be expected to do F1 proud. Mugello has the additional accolade of celebrating parent company Ferrari’s 1,000th grand prix start. If, that is, rising Covid-19 infection in Spain do not cause that race’s August 16th date to be scrapped without a replacement. In that case the Scuderia will celebrate its millennial grand prix in Sochi. Thankfully, at the time, of writing that looks unlikely.
Although Portugal hosted grands prix during the late fifties (at the Boavista and Monsanto circuits) and again between 1984 and 1996 (Estoril), the country had largely fallen off the F1 radar. However, the promoters have secured permission to stage the event with up to 65,000 spectators – tickets are already on sale via the circuit – so a celebratory weekend on the Algarve awaits.
Equally welcome is the return of circuits that once seemingly lost to F1 as a succession of the sport’s owners chased the mighty dollar. Two blasts-from-the-past, namely Imola and Nuerburgring, are mentioned above. Talk that Malaysia could return to the schedule in mid-November this year should not be discounted as idle chatter.
Vietnam remains desperate to stage its inaugural race, but such a trip makes commercial sense only if costs are spread over two Asian events. Initially Shanghai was to be twinned with Hanoi, but the Chinese authorities have placed bans on most international sporting events until the end of the year. Liberty needs a partner event to Malaysia which is close enough to share costs yet sufficiently distant not to potentially compete for ticket sales (assuming fans are admitted). Step forward Sepang, F1’s Malaysian home from 1999 to 2017.
A Liberty spokesperson would not be drawn on the chances of a Malaysian Grand Prix returning as part of an Asian set, but our sources are adamant talks are far advanced. “We could hear something soon, possibly even this week,” one proferred.
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Should a deal be agreed, F1 would head for Asia immediately after Imola (November 1st), then stage the two events as detailed before staging the final grands prix in the Middle East, in Bahrain and Abu Dhabi respectively. Our information is the Asian events would be held on November 15th and 22nd in a still-to-be decided sequence, with Bahrain and Abu Dhabi rounds hosted on December 6th and 13th respectively.
Don’t bet against this scenario. However, should the Malaysian/Vietnam duo not come off, then a triple-header set consisting of two races in Bahrain (the second potentially on a different track layout) and Abu Dhabi provides an alternate finish to the most tumultuous season in F1’s 70-year history. Another scenario has Turkey hosting a race, although this is thought unlikely given November’s rather chilly weather (12C daytime) and a need for rapid refurbishment to return the circuit to F1 level.
Either way, the championship is destined to feature 16 or 17 legs spread across at least two continents – in line with F1 CEO Chase Carey’s early projection of “15-18 rounds”. Who would have thought that back in March? Certainly not Mosley…
It is not, though, only the calendar that has been overhauled due to Covid-19, but in one case the traditional weekend programme. Track action at Imola will be confined to two days instead of three. This potentially indicates the way forward for future F1 schedules. The word is that Saturday will see a single, 90-minute practice session in the morning followed by qualifying in the afternoon, with support races slotted around the F1 sessions. Sunday will follow the traditional programme.
The downside to all these rearrangements is notable casualties, particularly in the Americas. However the loss of Brazil’s round is no surprise given the acrimony between Liberty and the race promoter, who holds a zero-value contract negotiated by the previous owners of F1’s commercial rights.
However, travel and tourism bans mean Austin, Montreal and Mexico are bigger picture losses, particularly as Liberty, a US company listed on NASDAQ, annually struts its stuff in Texas and hosts big-rollers at all three events. However, at least the grands prix are likely to return next year, pandemic permitting.
Permanent circuits that chose to drop off rather than host ‘ghost’ races include Zandvoort, Paul Ricard and Suzuka. This year’s loss of Zandvoort was a blow for hundreds of thousands of Dutch fans who voted with their wallets even before tickets for the return of the venue which last hosted a F1 grand prix in 1985, went on sale.
The promoters planned to attract 100,000 fans on each of the three days. Demand was so high thrice that could have been off-loaded if they had the capacity.
However, the promoters, who planned a massive ‘green offensive’ by restricting travel by car to the event, decided the return of F1 to the Dutch dunes warranted massive celebrations – complete with (local brew) Heineken parties, DJs and other activities. Then circumstances scuppered such plans, and thus the promoters took hard decisions. Next year’s parties promise to be even better, more spectacular, so book early as accommodation in and around Zandvoort is limited and frightfully expensive!
The French Grand Prix’s reason for sitting out this year is said to be economic rather pragmatic, for the event holds disaster insurance policies with pandemic indemnity. Thus, like the Wimbledon tennis tournament which was similarly insured and cancelled this year’s competition without major losses, the promoters could call off the event rather than battle on against the odds.
One of the weaknesses of Liberty’s model of targeting ‘destinations cities’ is, though, that these generally involve street circuits, which incur enormous annual costs. This year Monaco, Baku and Singapore could not commit to the expense of building circuits while enormous uncertainty prevailed. Clearly, they learned from Melbourne, which built its Albert Park circuit at an estimated cost of AUS $10 million (£5.5m), to no avail.
Still, despite the drop-offs, Liberty has done a fine job of salvaging this season. It cannot afford to rest on its laurels, however, for the 2021 F1 calendar needs sorting urgently. The potential after-effects from the pandemic are an obvious concern.
For example, Melbourne is unlikely to commit to 2021 track build unless the city fathers are absolutely convinced their event can play to a full house and not be disrupted again. Given that it takes two months to build the track, a decision would need to fall by the end of the year. Ditto Monaco, which needs to decide by the end of March whether to proceed with their construction works. Similar decisions could affect Baku and Singapore later in the year, particularly if second waves hit either city, and so on.
Such factors can have severe knock-on effects – Australia’s freight costs are spread across a number of Middle Eastern and Asian races, while F1 calendars are generally built ‘outwards’ using Monaco’s traditional Ascension Day weekend as key dates. F1’s schedule is like a giant jigsaw puzzles, each piece interlocking with others. Discard a single piece and a glaring hole of peculiar shape is evident.
Throughout the current crisis Liberty has proven itself adept at slotting in replacements at very short notice, many of which will wish to feature again on future calendars. Thus this year has provided Liberty with a stock of back-up circuits; the downside is, though, that they are seldom a perfect fit for the spaces they wish to fill, nor do they pay top dollar – or they would have been included in the first place.
A further point to consider is that in most instances these stand-ins were offered races at bargain rates (or paid to stage events) due to Liberty’s need to string a calendar together in a compressed timeframe. Persuading promoters to sign up at full rates in future will be no easy task. Too much of a good thing cuts both ways.
Still, don’t be surprised if 2021 starts in Bahrain – preceded by testing on the desert island – with the calendar thereafter as normal a course as possible. If needed, Melbourne’s race could move to September as part of a set with Singapore and Japan. Until life returns to normality anything and everything remains possible, and that applies to F1 as much as it does to the rest of the world.
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