The impact of COVID-19 on F1’s business in 2020, in numbers + comparison to 2019 and 2018
- Formula 1 hosted 17 races in the 2020 Formula 1 season after the COVID-19 pandemic forced a revision
- The races were contested between July-December 2020
- Liberty Media reports an average of 87.4 million viewers per race
Liberty Media Corporation announced that its President & Chief Executive Officer, Greg Maffei, will host a conference call to discuss results for 4th quarter of 2020 on Friday, February 26th, at 10:00 am (EST)/02:00 pm (CET)
Yet another off-season story to look forward to?#F1
— Kunal Shah (@kunalashah) February 11, 2021
Here are some interesting numbers (unaudited) from Formula 1‘s results for 2020:
Total revenue
- 2018: $1,827 million
- 2019: $2,022 million
- 2020: $1,145 million (-43%)
For 2020, Formula 1 reports that total revenue of $1,145 million was split between
- Race promotion fees (12%) – COVID-19 impact: fans not being permitted to attend races; ‘limited revenue’ earned from replacement races
- Broadcast fees (55%) – COVID-19 impact: altered schedule that triggered lower fees
- Advt. & sponsorship fees (17%) – COVID-19 impact: Formula 1 wasn’t able to deliver full commitment towards their sponsorship contracts. The earning was either lower in 2020 or deferred earning to future years
How did 2020 compare to 2019 and 2018?
- Race promotion fees (% of total revenue)
- 2020: 12%
- 2019: 30%
- 2018: 34%
- Broadcast fees
- 2020: 55%
- 2019: 38%
- 2018: 33%
- Advt. & sponsorship
- 2020: 17%
- 2019: 15%
- 2018: 15%
Spend x to host a private race with the forecast that y will be the revenue from each race; where y > x in this scenario & y – x is the revenue that #F1 will make & distribute. It’s easier said, than done. Let’s see how Liberty Media tackles this situation.
— Kunal Shah (@kunalashah) April 14, 2020
The TV-only races that Formula 1 held in 2020 led to the increase in broadcast revenue. This was also due to a significant decrease in race promotion revenue. “Race promotion revenue was significantly lower in 2020 as a result of the reduced calendar and one-time revised fee arrangements, as most Events were closed to fans, which provided very different economics for the promoters,” as reported by Formula 1 in an official filing.
The Business Of TV-Only F1 Races
Total team payments
- 2018: $913 million
- 2019: $1,012 million
- 2020: $711 million (+30%)
Total team payments decreased in 2020 due to lesser races contested (17 vs. 21)
Operating income:
- 2018: -$68 million
- 2019: +$17 million
- 2020: -$386 million
2021 Concorde Agreement
Formula 1 secured the commitment of the 10 participating teams to continue participating in the sports from January 1, 2021 until December 31, 2025.
Key points:
- Teams may terminate their rights and obligations to Formula 1 by giving one full season’s written notice (among other circumstances)
- Consent of 70% of the Teams is required if there are more than 24 races in a season or if there are fewer than 8 races across Europe & North America combined + introduction of new sporting and technical regulations
Liberty Media’s official report can be accessed here.