McLaren boss Zak Brown believes Formula 1 is in a ‘very fragile state’ and suggests as many as four teams could disappear as a result of the current COVID-19 pandemic.
Motorsport has largely been placed on hold as the world comes to grips with the current situation, with travel and mass gathering bans now common place.
The opening six races of the 2020 Formula 1 season have been cancelled or postponed with no clear indication as to when track action may resume.
Canada is currently the first event scheduled to host an event, though in recent days two other flagship events in Montreal have been cancelled.
“This is potentially devastating to teams, and if [it is devastating] to enough teams – which doesn’t have to mean more than two – then very threatening to F1 as a whole,” Brown told the BBC.
“Could I see – through what is going on right now in the world if we don’t tackle this situation head on very aggressively – two teams disappearing? Yeah,
Take the short survey.
“In fact, I could see four teams disappearing if this isn’t handled the right way.
“And then, given how long it takes to ramp up an F1 team, and given the economic and health crisis we are in right now, to think there would be people lined up to take over those teams like there has historically been… I don’t think the timing could be worse from that standpoint.
“So I think F1 is in a very fragile state at the moment.”
Even the sport itself has taken a hit with its current stock shedding 46 percent to $3.1 billion in two months.
Throughout this, the sport must continue servicing a loan which Forbes reports as a $500 million undrawn revolving credit facility and an almost $3 billion loan.
Defaulting on those payments, it’s reported, could see the lender able to take control of the sport from Liberty Media.
Race promoters are also under pressure with one suggesting Formula 1 will need to accept lower fees.
“They have to be willing to accept lower fees if they want their promoters to be healthy,” one promoter told the Independent.
Without advanced ticket sales many promoters have already taken a hit while the uncertainty surrounding the current calendar exposes them to potential cancellation fees with service providers.
“We reserve hundreds of buses which have to be booked 90 days before the race and have cancellation fees,” the unnamed race organiser said.
“We have another contract for the traffic because we hire hundreds of police officers over the race weekend and there are cancellation penalties for that too.
“Then there’s the setting up of all the temporary grandstands and hospitality tents which are ordered and negotiated six to eight months before the race and are set up sixty to ninety days ahead of it.
“Once the race is six weeks away we are spending more than a million euros a week to prepare.”
At McLaren, some staff have been put on furlough as they look to ride out the current situation.
Though not alone in doing so, Brown admitted he’s surprised all teams haven’t done something similar.
“While we’re a well-funded racing team, everyone has their limits – and as it relates to F1, it is no secret we lose a lot of money and my shareholders want value creation out of F1,” he said.
“So just letting the losses widen is not an option.
“I don’t have an unlimited cheque book, so it was the responsible thing to do, and quite frankly I am disappointed but not surprised that many teams haven’t already followed suit.
“I know some have, but some haven’t.
“I think there is a real danger in F1 that we as an industry can put our head in the sand on topics and now is not the time to put your head in the sand.”
Discussion about this post