McLaren chief executive Zak Brown has warned Formula 1 is in a “very fragile state” due to coronavirus. The escalating COVID-19 pandemic has brought the sport to a halt with two races – including the showcase Monaco Grand Prix in May – cancelled and six postponed so far. With dwindling revenue streams, Brown has warned about the potentially perilous state of the sport.
“Could I see – through what is going on right now in the world if we don’t tackle this situation head on very aggressively – two teams disappearing? Yeah,” he explained to BBC Sport. “In fact, I could see four teams disappearing if this isn’t handled the right way. And then, given how long it takes to ramp up an F1 team, and given the economic and health crisis we are in right now, to think there would be people lined up to take over those teams like there has historically been… I don’t think the timing could be worse from that standpoint. So I think F1 is in a very fragile state at the moment.”
Reasons for McLaren CEO’S warning
– Eight Races have been called off this season because of Coronavirus an no action possible till Canadian Grand Prix on 14 June at the earliest. Race fees are one of the three biggest sources of income and the other two streams, broadcasting rights payments and sponsorship, will be similarly diminishing for the teams
– Budgets to run the Formula 1 team is very high and most of the teams want the budget cap should be reduced to less than $150 million per season. According to Auto Motor und Sport, Mercedes is the team open to dropping the gap to $100m while other big teams Ferrari and Red Bull are opposed.
Already it has been announced that Formula 1 will continue with the 2020 chassis into next season with the new 2021 regulations deferred by a year. Formula 1 bosses are also discussing homologating other parts, such as the Safety Cells. Brown says if F1 doesn’t do something, it could lose almost half the grid when the races resume.
A crisis meeting on 6th April between Formula One bosses ended with an agreement to look further into the possibility of lowering a budget cap. Teams had already agreed to reduce the original US$175 million cap in 2021 to US$150 million as a result of financial problems caused for the series due to Covid-19. However, Mercedes, Ferrari and Red Bull reportedly pushed back on a proposal to reduce the cap again to US$125 million. Additionally, a proposal to delay new rules by a further year to 2023 was rejected.
Williams team announce 20% Salary Cut for the drivers
It is anyone’s guess when the season will eventually get underway with the teams debating various ways to reduce their running costs into next year. The Williams team has already reacted to the seriousness of the situation by announcing they had put a number of staff on furlough, with drivers and management taking a 20% pay cut. Racing Point have also put staff on furlough and have accepted voluntary pay cuts from their drivers Lance Stroll and Sergio Pérez.