As the novel coronavirus (COVID-19) pandemic keeps racing sidelined virtually worldwide, revenue streams have dried up for teams often dependent on race purses and corporate sponsorship.
Formula One is taking taken steps to help shore up the finances of its teams in the absence of steady cash flow.
Autosport quoted a top Formula One official Thursday as saying that F1 had provided some teams with “early payments” to weather the shutdown.
Formula One has yet to race this season as its first nine rounds of 2020 have been canceled or postponed. The schedule currently is scheduled to begin June 28 with the French Grand Prix after the April 7 announcement that the Canadian Grand Prix had been postponed from June 14.
Austerity measures already have been taken in F1, which has furloughed nearly half of its staff through the end of May and also has seen voluntary pay cuts for senior leadership. The McLaren team also has furloughed employees, while drivers Carlos Sainz Jr. and Lando Norris and CEO Zak Brown took voluntary salary reductions.
Greg Maffei, CEO and president of F1 parent company Liberty Media, told Autosport that some teams were paid early to ensure their viability.
“We have advanced money in advance of team payments for certain teams already,” Maffei told Autosport. “There are cases where we may do more of that; there are other things that we might do to bridge teams that might need help. We want to make sure that teams are solvent because they are part of what we need to race successfully in 2020, 2021, and beyond.”
Though NASCAR seems headed toward a mid-May return, it bears watching if similar steps might be taken with America’s biggest racing series that parallel F1.
With many sponsors withholding payments until racing returns, some Cup teams have had to resort to furloughs and layoffs to trim budgets. The resumption of the Cup schedule will mean a resumption of the purse and charter money that teams receive through their business pact with NASCAR, which derives much of its revenue through TV rights fees.