This week’s decision to cancel the Bahrain Grand Prix due to civil unrest is expected to cost the organisers an estimated $100 million in contract cancellations.
The advertising revenue at F1 circuits is received by owns F1’s rights-holder, Formula One Administration, which also gets the race hosting fees. Bahrain’s royal family pays an estimated $34m annually but FOA’s chief executive, Bernie Ecclestone, has waived the fee since the race will not be taking place.
The biggest sponsor of the Bahrain Grand Prix is national airline Gulf Air, which pays an estimated $6m for naming rights to the race. This tab would be picked up by CVC, the private equity firm that majority-owns FOA.
According to data from F1’s trade guide, Formula Money, the 12 F1 teams collectively face losing around $40m due to penalty clauses in their contracts that apply if a race is cancelled.
Ferrari is expected to lose the most from the cancellation, with $11m in lost sponsorship revenues.
Last year 44,000 spectators paid a total of $14m to watch F1’s opening round at the Bahrain International Circuit, which is owned by the country’s royal family.
Meanwhile Ecclestone had already paid for shipping of tonnes of freight to Bahrain in advance of the race, which was scheduled to take place on March 13. The shipment will now be redirected to Australia, which will host the first race of the season on March 27.
Even if the political climate improves, it seems unlikely that Bahrain could host a Grand Prix later this year since the F1 calendar had already reached its limit with 20 races – the highest number ever held in one season.
One suggestoin accoridng to a senior FIA official is that Bahrain and Abu Dhabi Grands Prix could go back-to-back by rejigging the Formula One calendar for this season. But due to the packed calendar, this would mean pushing the finale rack in Brazil back to the first weekend in December.
Mohammed ben Sulayem, the World Motor Sport Council vice-president, said: “This is an emergency and in an emergency we need to work together.”