The big news today in Formula 1 is not the Ferrari launch, nor the fact that Fernando Alonso will not be at the Alpine team launch, but rather the low-key announcment in the United States about the Q4 and full year results for the Formula 1 group. This was not expected to be very good but they were actually slightly better than expected, with Q4 revenues of $ 485 million, compared to $523 million in 2019. However the bad news was that the full year figures were $1.145 billion in 2020 compared to $2.022 billion in 2019. It was thought that the full year figure might be as low as $1 billion, so $1.1 billion is not as bad as some thought might happen but it is still bad.
Why does it matter? Because the annual revenues of the 10 teams are based on percentages calculated from the annual revenue figure, which means that the prize fund will be 42.75 percent down on last year. That is a big hit for all the teams and the reason why there is an engine freeze, a lower budget cap and frozen chassis this year. In fact, according to the SEC filings on Friday, the team payments dropped from $1.01 billion to $711 million, which means a reduction of only 30 percent, which is rather less than anticipated. It is safe to speculate that some of the team payments made were in the form of loans early in the year, when everything was closed down and teams were in danger of getting into trouble because of their cash-flow, and these payments would have had to be paid back later in the year. The SEC filings include the fact that “team payments in 2020 included one-time fees paid to teams upon signing the 2021 Concorde Agreeement”. So the actual payment figure was higher than it would normally be. The teams knew a hit was coming and took the necessary steps. However, it does mean that some of them have taken on debt, while others have sold equity in order to balance their books.
In the overall scheme of things this is not too bad. It is better to know the numbers than waiting to hear what they are, which means that teams can crunch out their budgets for the year and decide how much to spend on developing the 2021 cars and what to spend on 2022. It remains to be seen what the figures will be like in 2021 – that depends on the number of races – but it is clear that no-one wants the same sort of thing again in the future.
joeblogsf1 
Wonder how BCE would have dealt with things ?! Probably ended up owning half the cars on the grid and most of the circuits….. or just pulled the plug. Strange times. Hey Ho !
But it does seem that the operation is in good hands and there is a deal more pragmatism being exercised. The next couple of years will be very interesting.
The $711 million paid to teams in 2020 included one-off payments for signing the new Concorde Agreements – so the underlying picture for team income in 2021 is worse than your stated ‘only 30%’ reduction. For at least three of the ten teams, surviving 2021 will be a challenge.
Yes. I spotted that after writing the story and haven’t yet had time to update.
All of the UK based teams and their suppliers will have been able to claim from the Coronavirus Job Retention Scheme. McLaren Racing made a claim in December according to the public records.
I hope Alonso isn’t chasing a job at Liberty.