F1 in crisis between staff furlough and bosses’ pay cuts
The COVID crisis put a financial emergency to F1. Bosses are taking pay cuts and workers are in furlough.
Formula 1 is experiencing a series of problems that are more serious than a simple “frozen season”.
The Covid-19 emergency is, in fact, obliging the teams to a long shutdown and takes them away the money that they earn from both sponsors and tickets.
This #WorldHealthDay, we say a huge thank you to all the nurses, doctors, and health workers on the front line in the battle against Covid-19.
— ROKiT WILLIAMS RACING (@WilliamsRacing) April 7, 2020
Play your part by #SocialDistancing & #HandWashing
We will get through this together 👊#WeAreWilliams 💙 pic.twitter.com/td4HoY5sXi
This sanitary emergency is causing a financial meltdown of the whole Circus. “If we go on like this, there will be at least four teams that will not be able to be on the grid in the next season”- McLaren’s CEO Zak Brown just warned the FIA.
The teams, the FIA and Liberty Media though, are doing their best to face this emergency, as they had a crisis meeting in which they discussed about any single problem and how to deal with it. They reduced the budget cap, they are trying their best to host at least 15 or 18 Grands Prix and they are seriously thinking to shut up the doors to host the races with the staff only.
This could be enough, though. The reclusion of the factories is forcing the teams to pay their workers to stay home. This leads to just a few of marketing goals reached, in many more hours than predicted and a lot of people at home.
The teams are now putting their employers in furlough and cutting out their drivers’ wages . The news is that this emergency is targeting the bosses too. In fact, the teams’ bosses are experiencing a pay-cut during these days. The same Chase Carey has to deal with more than a voluntary reduction of his salary.
This is a necessary move as the gains of the 2020 season will be almost none and Formula 1 still has to pay for the running costs. In 2019 F1 declared that they have payed $381m expenses, of which $147 were classified as “administrative general expenses”.
Only Liberty Media has about 400 people working at their head office in London or at Biggin Hill in Kent, where the TV is located.
This means that now even F1 has to do some savings, like the British-based teams McLaren, Williams and Racing Point in putting its staff on furlough.
