These are tough times for everyone and global sporting properties are no different. Be it sports companies or sporting IP’S like Formula 1 everyone is impacted by the Covid19 and finding different ways to battle the financial impact of the aftermath of the pandemic
Formula 1 agrees with creditors to refinance $3.4 billion loan
According to Sportcal, Formula 1 has come to an agreement with creditors to refinance a $3.4 billion loan and credit line to overcome the financial impact of the coronavirus pandemic.
This includes a $2.9 billion loan and a revolving credit line available to the competition for $500 million. Under the new conditions, financial leverage will not apply until 1 January, 2022.
Formula 1’s parent company Liberty Media, the US media giant has agreed refinancing terms with its subsidiary Delta Topco Limited, which holds all of its interests in the sport.
In exchange, Formula 1 will undergo a series of additional conditions to the current contracts, which includes maintaining a minimum liquidity of $200 million and certain restrictions on dividends, as well as other payments and not incurring additional debt.
Chase Carey, chairman and chief executive of Formula 1, 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 and we are excited to start the season in Austria.”
Formula 1’s revenues drop from $246m to $39m
Last month Liberty issued Formula 1’s first quarter financial results showing a significant drop in revenue, reaching only $39 million in the first three months of 2020 as opposed to $246 million for the same period last year.
In April, it announced it had increased the sport’s liquidity and given some of its teams advanced payments to ensure their survival while the sport is suspended because of the pandemic.
The 2020 Formula 1 season, which was due to start in March, will get underway this weekend in Austria, with the first of eight behind-closed-doors European races condensed into 10 weeks.