Ferrari hopes that the economic damage will only last for this year
Ferrari CEO Camilleri spoke about the economic damage that Formula 1 teams will suffer because of the Coronavirus. Camilleri is confident, however, that this damage will only last for 2020.
All ten Formula 1 teams are going through a difficult period, due to the economic obstacles that Coronavirus is causing. Already several Grands Prix have been canceled or postponed, and even if the leaders of the Circus still hope to be able to run 18 races, in any case the teams will suffer an economic damage, and it will not be slight.
Ferrari CEO Louis Camilleri said he hopes that this unavoidable economic damage will only last for 2020, but he is also aware that it is difficult to predict today what will happen in the next months.
“While the Formula 1 hit to revenues and earnings is not an easy matter to digest, the good news is that the significant losses incurred should be short-lived and contained to 2020”, Camilleri said.
“Our current thinking in terms of revenues, although it’s somewhat unpredictable, in 2021 they should come back certainly in terms of the races, which is a big part of it, and obviously also in terms of sponsoring”.
“We know that the Formula 1 Group has worked a lot in terms of trying to attract new sponsors. Obviously the situation has delayed certain things, but hopefully by 2021 that will have come back”.
“At this stage, we don’t really foresee a continued reduction in the commercial rights holder revenues in terms of Formula 1 for next year, all things being equal”.
To help the teams from an economic point of view, Formula 1 has already postponed the entry into force of the new regulation from 2021 to 2022. In addition, the budget cap will be set at 145 million from next year.
“There is no way we can offset through cost reductions. Although we have reduced costs in Formula 1, there is no way we can offset the hit to the revenues on sponsorship fees, and especially on the revenues that are generated by the commercial rights holder”.
"The hit to revenue essentially goes down to the bottom line, with some minor offsets. But it’s a big hit, and as I said, the good news is that it’s confined to this year hopefully", Camilleri finally told.
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