F1 Bottom-Half Teams In Trouble After Coronavirus Crisis?
2020 has not much left to offer, or so it seems with the coronavirus crisis not ending any time soon. Amid the crisis, Formula 1 like most businesses around the world are searching for ways to get back on their feet. It is still too early to predict the intensity of an impending downturn as the virus is still on the move. Though, we can say for certain that the F1 teams at the bottom of the constructor rankings are going to suffer a lot if Liberty Media has not planned to help them stay afloat.
Deaths caused by coronavirus have crossed 30,000 worldwide with the US having the most confirmed cases as of now. Italy alone has seen 10,023 people die of the virus. So, right now, financial recovery is the least important issue on the table for leaders. Four months after the discovery of the coronavirus, countries are still working to limit the contagion and potentially stop people from dying.
Economic Effects of Coronavirus
Awareness of the virus among the people is proving to be more difficult than finding the cure to the disease at hand. For the mid to low-income households, staying home is difficult. That is strikingly depressing as well as understandable because to save themselves from the virus they need to stay healthy, to stay healthy they need to consume food and to consume food, they need to earn money to buy food. How are they going to earn money if they do not have a job?
As far as the government’s efforts go, they are too busy building emergency centers for the ill and helping doctors treat the confirmed cases. That does not even include the sizeable budget the research departments need to work towards finding a vaccine. The global condition is highly volatile.
Another Great Recession Looms?
At times like these, we need to remind ourselves of the Global Financial Crisis of 2008 that took the world by surprise and later turned into the Great Recession. Though the reasons behind a potential meltdown in 2020 might not have a whole lot in common with the one in 2009, it certainly bodes similar consequences should the economies worldwide fail to control the pandemic in time.
Let’s talk about the facts here concerning most businesses around the world following lockdowns amid the crisis. In most places under lockdown, businesses have stopped operating or their active hours dramatically decreased. The immediate result of that is a cut in the employees’ salaries or if the employees are getting paid, the businesses are taking all the economic punches. Recently, we saw FC Barcelona, one of the rich football clubs in the world, cut the player wages to save itself from an economic collapse. Overall, the conduits of revenue are not producing enough flow to keep the businesses running. We have not counted the uncertainty of the value of goods and services arising from the void created between the consumers and the market.
However, well-to-do businesses having enough profit may have the capacity to go through this difficult period. Most of the problems are arising for entities that did not have a contingency plan ready. They are the ones suffering the most which bring us back to Formula 1 constructors and manufacturers with the least annual earnings compared to those at the top of the chart. If the virus is not contained, we might soon be seeing bankruptcies everywhere in F1.
F1 Teams Cope
The United Kingdom, the country where most F1 teams are based, is in lockdown. However, the situation is just as unrelenting or, some would say, worse than the UK for the Italy-based teams. Formula 1 season already looks done. That begs the question: where are the teams going to generate their revenue from? Sponsors don’t come for free. With the exception of the few on top, the rest just don’t have the funds to carry themselves. Williams F1 team used to be one of the elites. Now, they are driving downhill.
Losing the teams could be very damaging for the Formula 1. Associations and history carry a lot of value in F1. If they lose the teams, there could be a shakedown that might get out of control. Some teams have been involved in the business for a very long time. That means they have developed a strong fanbase. The fanbase should be treated as a subdivision of all the fans of F1. It is ridiculous to think of a situation where the biggest brand of racing loses some of the biggest racing teams in the world.
It needs to be said that the Formula One teams are not alone in this global crisis. Difficult times have come many times during our history and somehow, even at desperate times, we have survived. Hopefully, we will survive this time too.
Deaths caused by coronavirus have crossed 30,000 worldwide with the US having the most confirmed cases as of now. Italy alone has seen 10,023 people die of the virus. So, right now, financial recovery is the least important issue on the table for leaders. Four months after the discovery of the coronavirus, countries are still working to limit the contagion and potentially stop people from dying.
Economic Effects of Coronavirus
Awareness of the virus among the people is proving to be more difficult than finding the cure to the disease at hand. For the mid to low-income households, staying home is difficult. That is strikingly depressing as well as understandable because to save themselves from the virus they need to stay healthy, to stay healthy they need to consume food and to consume food, they need to earn money to buy food. How are they going to earn money if they do not have a job?
As far as the government’s efforts go, they are too busy building emergency centers for the ill and helping doctors treat the confirmed cases. That does not even include the sizeable budget the research departments need to work towards finding a vaccine. The global condition is highly volatile.
Another Great Recession Looms?
At times like these, we need to remind ourselves of the Global Financial Crisis of 2008 that took the world by surprise and later turned into the Great Recession. Though the reasons behind a potential meltdown in 2020 might not have a whole lot in common with the one in 2009, it certainly bodes similar consequences should the economies worldwide fail to control the pandemic in time.
Let’s talk about the facts here concerning most businesses around the world following lockdowns amid the crisis. In most places under lockdown, businesses have stopped operating or their active hours dramatically decreased. The immediate result of that is a cut in the employees’ salaries or if the employees are getting paid, the businesses are taking all the economic punches. Recently, we saw FC Barcelona, one of the rich football clubs in the world, cut the player wages to save itself from an economic collapse. Overall, the conduits of revenue are not producing enough flow to keep the businesses running. We have not counted the uncertainty of the value of goods and services arising from the void created between the consumers and the market.
However, well-to-do businesses having enough profit may have the capacity to go through this difficult period. Most of the problems are arising for entities that did not have a contingency plan ready. They are the ones suffering the most which bring us back to Formula 1 constructors and manufacturers with the least annual earnings compared to those at the top of the chart. If the virus is not contained, we might soon be seeing bankruptcies everywhere in F1.
F1 Teams Cope
The United Kingdom, the country where most F1 teams are based, is in lockdown. However, the situation is just as unrelenting or, some would say, worse than the UK for the Italy-based teams. Formula 1 season already looks done. That begs the question: where are the teams going to generate their revenue from? Sponsors don’t come for free. With the exception of the few on top, the rest just don’t have the funds to carry themselves. Williams F1 team used to be one of the elites. Now, they are driving downhill.
Losing the teams could be very damaging for the Formula 1. Associations and history carry a lot of value in F1. If they lose the teams, there could be a shakedown that might get out of control. Some teams have been involved in the business for a very long time. That means they have developed a strong fanbase. The fanbase should be treated as a subdivision of all the fans of F1. It is ridiculous to think of a situation where the biggest brand of racing loses some of the biggest racing teams in the world.
It needs to be said that the Formula One teams are not alone in this global crisis. Difficult times have come many times during our history and somehow, even at desperate times, we have survived. Hopefully, we will survive this time too.
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