Formula 1’s coronavirus-induced hiatus has almost completely wiped-out Ferrari’s first-quarter profits from other areas of its business, CEO of Ferrari and chairman of Philip Morris International, Louis C. Camilleri, confirmed yesterday.
Speaking alongside the release of the company’s Q1 figures for 2020 that revealed commerical, sponsor and brand revenue was down €39 million (30%) compared to the same time a year ago, Louis C. Camilleri admitted the Scuderia’s inactivity had severely affected its bottom line.
“Formula 1 is undoubtedly the activity that will adversely affect our results in 2020 in the harshest manner and also the one that is by far the hardest to predict,” he told investors in a conference call. – “This clearly implies a drastic reduction in the revenues that are generated by the commercial rights holder, as well as sponsorship fees, our two primary sources of revenue.”
While the Scuderia is still set to receive its long-running ‘heritage bonus’ from commercial rights holders Liberty Media, Camilleri indicated the team could not make up for the loss of prize money from cancelled races.
“The hit to revenue essentially goes down to the bottom line, with some minor offsets. It’s a big hit. The good news is it’s confined to this year, hopefully.” – the Ferrari boss added.
Further quizzed about the Formula 1 team’s long-term prospects, Louis C. Camilleri suggested the incoming cost cap — currently set for $145 million — will be significantly beneficial, although it is believed to be lower than Ferrari had initially hoped.
“It remains our hope that such [a] ceiling will render Formula 1 more economically sustainable for all participants while ensuring that it remains the premier racing championship globally and the source of significant advances in automotive innovation and technology,” – he concluded.
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