CEO Chase Carey believes that the loan, which conditions have been amended by Liberty Media, will help the company and F1 in general to get through the financially unstable situation brought by the pandemic. The loan, as well as a $500m credit facility are governed by a covenant where the lenders specify the ratio of total debt to profit that F1 is obliged to operate within. 

In a usual situation this ratio wouldn’t be a problem, because F1’s annual profits in the past have always been sufficient to keep it below the required limit. The 2020 however, is nothing usual, and if the profits for this year will be severely impacted by the COVID-19 crisis, and F1 will not be able to recover from it that fast during 2021, the risk in breach of the covenant can be very high. 

Liberty Media addressed that risk of breach by negotiating an amendment, that specifies that “subject to compliance by F1 with certain additional conditions, the net leverage financial covenant shall not apply until 1 January 2022.”

That means that the original conditions of the covenant have been postponed until the end of 2021 to help F1 with the difficult times they might face during 2020 and 2021. 

Chase Carey says that the change in the conditions will be a big help for the company. As he said: “This new flexibility in our debt covenants, along with a strong balance sheet and ample liquidity, will enable us to weather this difficult time.”