Ferrari F1 team could be set to face significant losses in revenue on account of the continuing problems caused by the Covid-19 pandemic, according company CEO Louis C Camilleri.
The iconic racing team fears that the effect of the pandemic could be felt for some time with Formula One racing looking much different with no spectators allowed to attend races as well as promoters not having to pay the typical hosting fees expected, therefore impacting the income for the sports’ key stakeholders.
Between the months of April and June, Ferrari stated a net profit of only €9million, which contrasts greatly from last year’s profits of €184 million.
“F1 this year will be, in terms of the profit and loss, the biggest hit we face because of the reduction in the revenues we receive from the Commercial Rights Holder, as well as reductions in sponsorship given the reduction in races,” Camilleri started.
“It's clearly in the high tens of millions, in terms of the hit,”
“We'll see in terms of next year it should be better, because hopefully, by next year, we'll be back to a full race schedule, and we will get the necessary revenues in terms of sponsorship and from the commercial rights.
“So, it's a bit difficult to compare 2020 to 2021. But definitely in 2020, it is a very sizeable hit as we had anticipated in early May.”
Formula One’s season started back again in Austria, having undergone minor alterations because of the delayed start, including a condensed schedule, that currently covers 12 rounds all taking place in Europe, where teams will receive a smaller prize pot and lesser pay-outs from commercial revenues.
Ferrari has seen a drop off in performance level in comparison to Mercedes, which has been recognised by chairman John Elkann previously and reverberated by Camilleri.
“The starting point is there's no denying that we're facing a very difficult season, with a car that lacks performance on several levels.
“Our competitors, Mercedes in particular, are incredibly strong and hats off to them.
“Formula One is - this year will be, in terms of the P&L, the biggest hit we face, because of the reduction in the revenues we receive from the commercial rights holder, as well as reductions in sponsorships, given the reduction in races.”
The Italian car manufacturer has recorded significant losses in revenue which may still suffer with the risk of the coronavirus still looming.
Sponsorship, commercial and brand revenues saw some of the biggest drops from the lack of Grand Prix’s taking place during the break. Revenue from these three main areas was €131 million, a fall of €48 million.
Another profit avenue effected by the pandemic was the production of Ferrari’s road vehicles alongside their shipments, which almost halved from the previous year.
Thus far, Formula One have only been able to confirm a 13-race calendar due to the ever-changing global situation but the goal still remains of having 16 rounds.
Author: Jake Wilkin