Uncertainty over F1’s future

As we eagerly await news from the Austrian government about the first F1 Grand Prix of the season at the Spielberg circuit, one must remember there is no guarantee it will take place on the first weekend of July.

All appears to be well but the world is dealing with a highly contagious virus and that is going to continue controlling the 2020 Formula One season. Formula One Group CEO Chase Carey is still hoping for up to 18 races, with spectators allowed once the circus leaves Europe and we all look forward to that day, as some semblance of normality returns to the sport.

Recently Carey had the unenviable task of informing the world of F1’s current financial situation. It was not encouraging, with an 84% first quarter loss and the possibility of a similar result in the second quarter. He also admitted that the season may never start, saying: “We are increasingly confident, although there are no guarantees, that we will have a 2020 championship season.”

Unfortunately, the plan to hold two races at Spielberg and then two at Silverstone has run into difficulties due to the British government’s new quarantine regulations requiring travellers to the UK to self isolate for 14 days. This would mean that British teams would have to remain in Europe between races rather than returning to the factories. Cancelling these races would be a disaster for the British F1 industry and fans.

Motorsport UK chief David Richards is hoping for a change in the government’s position. In an interview with the Daily Telegraph, Richards said: “There is probably not one other sport that has such a big economic impact on this country as Formula 1, in terms of the number of people employed here, either directly or indirectly.

“With the right precautions, we must be able to find a sensible way to protect the community locally and to handle this professionally for the teams. I can’t see why that shouldn’t happen.” But the powers that be are already looking for a backup and discussions are taking place between FOM and the Hockenheim circuit in Germany.

Financial difficulties are taking a heavy toll on some teams. Recently the focus was on the plight of Williams F1 having to use its historic race car collection and factory as security on a £50 million (about R1-billion) loan from new driver Nicholas Latifi’s father Michael. Then, the day Daniel Ricciardo was confirmed at McLaren for 2021, news broke that the company was looking to raise £275 million. Put up as security was the company’s collection of historic cars and the magnificent Woking Technology Centre itself. The collection is made up of 152 race cars, of which a few will immediately be sold to specialist collectors.

With half the 2020 season effectively over without a wheel being turned in anger, many of the teams are placing their future in the hands of Liberty Media. Some British teams have taken up the government’s furlough offer to ensure employees have an income for the immediate future. Others have looked beyond the current situation and are facing an uncertain future.

It is constantly rumoured at least four teams may not grace the grid in 2021. With the new Concorde agreement yet to be signed by all concerned, doubts are arising regarding the future of the manufacturers within the sport. The effect of the pandemic on the global automotive market has resulted in huge financial losses and this raises the issues of whether teams such as Mercedes-Benz and Renault will be able to justify such expenditure on the sport.

The global financial recession of 2009 led to the withdrawal of Toyota, Honda and BMW. If both the German and French manufacturers should leave the sport it would mean Ferrari is the only engine supplier for all the remaining teams – not an ideal situation. Talking of Ferrari, team chief Mattia Binotto informed Sky Sports Italia that the company is looking at other forms of motorsport in a bid to retain staff which, he claims, would probably lose their jobs as a result of the proposed budget cap.

Binotto continued: “Ferrari feels a social responsibility towards its employees. Thus we have started to evaluate alternative programmes. I can confirm that we are looking at IndyCar, which is currently a very different category from ours, but will be more aligned with a change of regulation scheduled in 2022. We also observe the world of endurance racing and other series.”

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