Claire Williams about the cost of cancelling GPs for teams

Williams fears prize fund hit if F1 races lost

https://www.motorsport.com/f1/news/williams-fears-prize-fund-hit/4741426/

Williams deputy team principal Claire Williams fears that a series of cancelled races could impact the financial situation of the Grove team.
If events are cancelled Formula 1 won’t keep the hosting fees that are paid in advance by the promoters, and which contribute to the overall income which is shared by the teams and Liberty. Other income streams could also be hit if multiple races fail to take place.

Williams stressed that it was a priority to “safeguard our business,” and that it’s not year clear what the loss of races would ultimately mean for the teams.

“We're obviously, like F1, like everybody in every responsible business, monitoring the situation incredibly closely,” she said when quizzed by Motorsport.com. “We've got a steering committee at Williams.

“That's been in place for a couple of months now to make sure that we're acting responsibly and safeguarding everybody that works at Williams, and doing what we need to do based on the World Health Organisation's guidance. And that's all we can do at this stage.

“We have not got a case at Williams, we haven't. But we've got to make sure that we safeguard our business. And that comes in a variety of different ways to ensuring that we've got the capability for remote working, should we need to send our people home.

“I suppose the main consideration for any team is around manufacturing, because you can't manufacture parts at home. So if we have to shut down our factory that can be incredibly difficult.

“There's also the consideration around if we don't go to races, then what happens with prize fund money? Does that then decrease, which obviously would be incredibly difficult to manage? And I suppose at the moment, we're just hoping that that is not the case. And obviously, we're having conversations about insurance if it is the case, but it's not an easy situation to manage. We're in discussions at the moment [regarding insurance].”

Although teams will spend less if they are not travelling to races Williams insisted that some costs will stay constant: “You’ve still got wages to pay. Most teams, their wage bill is the largest proportion of their monthly expenditure.”

Williams says that F1 and the FIA have done the “best job” they can in the circumstances, and that they have to take their lead from the authorities.

“I think it's an incredibly difficult situation,” she commented. “I think for any business in whatever industry that you're operating in, it's incredibly hard to handle. And I think that they've done the best job they possibly can to act responsibly and to do what's required.

“They're managing it in close collaboration with the relevant authorities. And at the end of the day, I believe here it's up to the Australian Government to make the final call. And that final call has happened, and we're here racing. As far as I'm concerned, there is no case of corona in F1. And so therefore, we are playing it literally probably hour-by-hour.

“There are meetings going on regularly. I believe there was a meeting this morning with F1 and all our media people. And then we obviously have our team principals’ meeting which is scheduled every Saturday of race weekends, and I'm sure corona will be top of the agenda for discussion on Saturday morning, if we don't have a meeting prior to that.”

Williams said that in recent weeks teams had been “consumed’ by the coronavirus and its possible implications.

“Of course, it's our responsibility and duty of care to make sure that everybody knows what they should and shouldn't be doing. From increased hand-washing and contact with people and keeping themselves safe and making sure that if they do experience any symptoms that they're managing that appropriately. And we're giving all of our personnel the right support in order to do that.

“It has been a big piece of work that I'm sure all teams up and down the pit lane have been consumed by over the past many, many weeks, now that we're into this situation. And it's simply about keeping all your personnel as safe as you possibly can while we continue to go racing.”

- by Adam Cooper

 

We could see quite a different F1 picture, once the dust settles down, when the season can finally start (in June, or perhaps later ?).
Some teams may have run of cash by then, having missed the interim payment from Liberty.
Others may have put any R&D on hold, or would have reduced their staff to survive the storm.
In between, there are bills and wages to pay, overheads, rents, loans, etc ....
F1 is 10 companies, some are already on the brink and could go out of business in this.
It could be that some sponsors will baulk at paying the teams, since there would be no return.

 

One could argue that Liberty paid a lot of money to buy what is a very volatile business.
F1 is entertainment, needing a lot of organisation and investment, for no certain return.
Liberty has shown that to make their businees profitable, they would have to expand it to 25 races.
To maintain that, they need a steady economic climate, no natural disaster, no political upheaval, no pandemic, etc ...
Coronavirus threw a spanner in the work, and destroyed all the plans.
I guess there must be very anxious people at Liberty now, questioning their investment.

 

Gene Haas already gave early warning of his team possibly exiting F1 at the end of this year.
He is desillusioned with the championship, and this season will probably make up his mind.

 

The FIA and Liberty were reactive to the decision made for them by the Australian authorities, McLaren, some drivers, etc ...
They were not pro-active and didn't cancel the GP before all the circus travelled at huge cost, although the writting was on the wall.

 

Convincing the organisers to pay $25M per race with a reduced field will be a hard sale.