Formula 1 reveals $136m loss for Q2 2020

Unable to race due to the COVID-19 pandemic, F1 owners Liberty Media revealed in their quarterly report the extent of the damage done, with Q2 2019 revenue of $620 million dropping to just $24 million for the April-June period this year.

As a result, its profits year-on-year for that period dropped from $14m in 2019 to -$136m in 2020.

Fortunately for both Liberty and F1's assorted stakeholders, racing has been able to get underway since, with five races already concluded and at least eight more to come.

However, as has been indicated elsewhere, F1 teams were hard-hit during the hiatus due to the absence of income racing usually provides.

"Since there were no events held during the second quarter of 2020, revenue recognition was limited, with recognized primary F1 revenue in the period consisting only of the elements of sponsorship contracts associated with non-race related rights," the report explained.

"No race promotion fees nor broadcasting fees were recognized. Similarly, other F1 revenue decreased due to zero revenue being generated from the Paddock Club and other event-based and television production activities.

"There was no team payment expense recorded, since such payments are recognized on a pro-rata basis as races take place on the calendar."

"F1 implemented certain cost cutting measures in the second quarter, including the elimination or deferral of non-essential expenditures, salary reductions and lower bonus accruals. F1 also utilized UK government-supported furloughs in respect of approximately 50% of its employee base for varying periods between April 3, 2020 and June 30, 2020.

"Personnel costs are expected to return to more normalized levels in the third quarter as most furloughed staff returned to work in advance of the F1 season commencement."

Speaking in the report, Liberty and F1 CEO Chase Carey did not directly address F1's losses, instead talking-up the sport's future prospects amid its return to racing.

“We were excited to return to the track in July and have now completed five races of what we expect will be a 15 to 18 race season,” he said.

“During the break we continued to move the business forward with a reduced cost cap for the 2021 season, and announced new broadcast and sponsorship deals. We reengaged with added purpose and determination, announcing our #WeRaceAsOne platform, underpinning our sustainability, diversity & inclusion and community strategies.

#WeRaceAsOne was launched as an initiative to further our sustainability efforts, to stand united against racism, in fight against COVID-19 and to further address inequality and diversity in Formula 1.

"We are thankful to the FIA, teams, promoters, our employees and other key partners that made this return to racing possible.”