Concerns about F1: 'They can't keep coughing up the costs as long as they can'

Formula 1 is planning to start the season as soon as possible, but in the background there are major concerns. F1 will have to pay for all the costs and according to Forbes that will cause huge losses.

F1 runs on all costs

The takeover of Liberty Media has gone well in recent years. TV revenues have increased and that is very important in the modern era. Especially now that fans are no longer allowed to come to the circuit, TV deals will soon be the only source of income for the sport. However, that might not be enough.

According to the financial magazine Forbes, Formula 1 will suffer an enormous loss if it has to bear the costs itself. Without a vaccine, however, fans still seem far from welcome on the circuits, which means that organisers cannot generate income themselves. So, Formula 1 actually has only one choice: they have to go on.

Bankruptcy for F1

Formula 1 will have to invest to run the races and that has a price tag. Formula 1 will then provide a large part, if not all, of the revenues of the organizing locations. According to Forbes, this normally provides more than 600 million dollars, where countries may now only pay a small fee for the promotion in the country.

Not only will Formula 1 lose that money, but it will also have to compensate the organizations that normally receive income from the sale of tickets. The tickets also generate over 600 million dollars in a year, which F1 now has to cough up in part. However, F1 itself does not only suffer from this, but also the teams.

The teams are dependent on the profits of Formula 1. The teams all get prize money at the end of the season and that could be less now that F1 itself generates much less money. Formula 1 still has a nice buffer according to Forbes, but for more than a year the F1 can't pay for all the costs without going bankrupt.