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Most of F1 historic circuits may be facing towards a financial crisis

All the social limitations set to limit the outbreak of Covid-19 may put Monza and many other milestone Formula 1 racetracks in real danger, due to the lack of economic investment possibilities.

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Most of F1 historic circuits may be facing towards a financial crisis
Fuente imagen: Motorlat.com

Coronavirus is an unprecedented misfortune Formula 1 has to face. The only relatable case happened almost two decades ago, when SARS epidemic struck on China in 2003, forcing the organizers to postpone of one year the debut of the brand-new Shanghai International Circuit. Luckly back then the disease didn’t turn into a worldwide pandemic and only the Chinese Grand Prix was forced to leave the calendar.
Nowdays the situation is dramatically worse, with the first half of the 2020 Formula 1 season already cancelled or postponed. Alpha Tauri’s team principal Franz Tost estimated the financial loss for every single team at around 2 million USD every time a race is cancelled.
There’s therefore no surprise in acknowledging that Liberty Media, in collaboration with all the teams and organizers, is trying its best to get the championship underway as soon as possible. The solution that came out at the end of the last briefing seems to be a season opener at the Red Bull Ring behind closed doors. The circuit is private and owned by the track’s title-sponsor Red Bull. The company’s incomes are massive enough to let them willing to sacrifice the tickets’ revenues to have their name everywhere during the first F1 race of the year.




A similar situation is expected to occur at the theoretical second round of 2020: being in the headquarters’ nearbies  of 7 out of the 10 Formula 1 teams, Liberty Media itself could cover the costs of racing without spectators at Silverstone, counting on the lowered logistic expenses.
Other GPs that may survive without ticket payers are those held to increase the hosting Countries image, and therefore directly financed by the local government. We are talking about Baku, Abu Dhabi, Bahrain, China, Vietnam and Russia. Half-empy grandstands seem to be the routine for those events and the image gains should easily overshadow the ticket’s missing incomes.
The american tour should be safe as well at the moment, with the calendar still forcasting the across-the-ocean races for the late autumn. On the other hand, those tracks have to worry about the short term financial prospects, as we’ve already discussed in a previous article.




The endangered circuits are mostly the Formula 1 classics, such as Montecarlo (already cancelled), Spa and Monza. The events’ promoters in those cases cannot rely on fundings coming from the governments. Those money are indeed usually spent as investments, expected to return in massive economic revenues for the local businesses. Let’s take a look for instance to the last year’s Italian GP: the town of Monza, thanks to the 200 000+ race spectators, has witnessed incomes for almost $25M shared between housings, restaurants, travels and facilities in general. The region therefore saw the hosting price as an opportunity and decided to fund the event. But if the GP will have to be held behind closed doors, all those economic returns will be none, and in this moment in time throwing money into the void is the last thing everyone is aiming for.
There’s also another key factor to consider: racetracks will have to be sure about the presence of spectators at least six weeks in advance, the minimum time requested to have working grandstrands. There is no margin for gambling, considering that a last-minute absence of spectators would represent a $1.5M worth sunk cost for the promoters.
Even assuming Liberty Media would cancel all the GPs’ hosting expenses, it’s easy to spot the difficulties and the risks for the organizers. If a situation similar to the late Australian GP’s cancellation would occur at Spa or Monza, the economic repercussions on those circuits would be catastrophic.


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