is COVID-19’s latest sporting casualty, says GlobalData’s Sportcal
Following the recent news that Formula One has postponed the Monaco Grandprix in response to the Coronavirus (COVID-19) outbreak; the potential for a truncated Formula One (F1) season is now a real possibility. However the impact that this will have on F1 in general and specifically with their media and sponsorship partners could be profound.
“With multi-million dollar media rights partnerships in place, there is a prospect of greater financial damage on the horizon if sponsors pull back on their commitments.
“The UK deal with Sky TV is worth $1.4bn alone, according to the GlobalData Sportcal Intelligence Centre. Should races be officially cancelled, it is not difficult to envisage broadcasters looking to recoup some of the revenue they have spent on rights fees in the short term, arguing that fees should reflect the final calendar delivery.
“There will also be a downstream impact on sponsorship. With F1 partners committing $272m as partners of the series, and a further $972m committed to team sponsorships, the lack of any on-track action could see sponsors looking to terminate partnerships early - especially for those in sectors currently facing the brunt of the financial fallout from COVID-19 as they look to drastically cut costs and keep their businesses afloat.
While the digital esports series could be an alternative means of fulfilling contractual obligations, this will only be a short-term solution for a series that is facing declining global audiences.”