F1 organisation furloughs staff – Carey takes pay cut
The Formula One Group has reportedly placed half of its 500 employees on leave in face of the coronavirus crisis, while chief executive Chase Carey has taken a 20 percent pay cut.
The global pandemic has disrupted lives and economies around the world, with Formula 1 not immune to the crisis.
Brought to a standstill, the sport has seen its three revenue streams – race fees, television rights and sponsorship fees – potentially reduced to ashes for 2021 while FOM’s overhead and running costs, estimated at $381m last year, remain.
F1 also has yet to disburse to the teams part of their earnings from last year which are paid out on a quarterly basis, an amount indicated at $1,012,000,000 for 2019.
The prospect of a shortened season would equate to significantly lower revenue and to a big hit to F1’s bottom line, a state of affairs which is clearly reflected in F1’s share price which has lost over 50% of its value over since the onslaught of COVID-19 in early February.
While half of its staff, located mainly in London, has been put on temporary leave this week, Ross Brawn and a group of directors have joined Carey by slashing their salaries by 20 percent for an initial period of two months.
On Monday, Williams and Racing Point followed McLaren in confirming the temporary lay-off of a portion of their employees, while drivers from all three teams have also take pay cuts.