Liberty Media provides financial boost to F1 and its struggling teams

credit: Shutterstock
credit: Shutterstock

Formula 1’s commercial rights holder Liberty Media has provided some manufacturers with advanced payments in order to combat the financial restrictions its teams have faced due to COVID-19 Grand Prix postponements.

The company has also reattributed its stake in Live Nation Entertainment, totalling $1.5 billion in net asset value, between Formula One Group and Liberty SiriusXM Group, resulting in Liberty Media being able to ‘support and enhance the Formula 1 business’ according to the firm’s CEO Greg Maffei

Liberty’s re-attribution of assets has boosted the sports liquidity, helping stabilise Formula 1’s financial situation whilst its calendar has been halted during the coronavirus outbreak.

The virus has postponed and cancelled nine races far resulting in the competition’s ten teams suffering financial repercussions, with some manufacturers furloughing its staff until the campaign officially begins. 

Maffei told Reuters that Liberty Media has already provided some teams with advanced funds in order to not only support the competition but its manufacturers as well.

He stated: “We have advanced money in advance of team payments for certain teams already. There are cases where we may do more of that. There are other things that we might do to bridge teams that need help.

“We’re certainly not viewing this as an open chequebook. But we understand this is a little different than say Live Nation which does do advances to artists but the scale here is much larger in terms of what a team requires.

“(These are) teams which we want to make sure are solvent because they are part of what we need to race successfully in 2020, 2021, and beyond.”

All of Formula 1’s plans to restructure its schedule and the possibility of creating behind closed door Grand Prix’s all have a financial effect on the competition’s sponsors and partners, including Liberty Media. However, the company has braced itself for these measures hence why the firm can focus on supporting the league’s teams.

Maffei added: “We are watching how the opening of certain events is happening in Western Europe, in certain countries, and looking at options around that that maybe the start of the calendar.

“If you run races with no live audience, we’ll obviously have lower profitability and maybe even no profitability. We may be capitalised sufficiently to handle that for 2020, but there are teams which will incur costs, particularly those that don’t have minimum guarantees from F1.”

Liberty Media has not revealed how many teams or which teams have been paid in advance during this period.

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