COVID-19 has hit the sporting industry hard. All major sports institutions and franchises have reported losses in their earnings. Many sporting events like the Olympics, UEFA Euro 2020, CONMEBOL Copa America have been rescheduled in 2021. Formula 1 is no different as the recent numbers suggest a dip in revenue.
Formula 1 suffered a record loss of $386m in 2020 in a season heavily disrupted by the Covid-19 pandemic. Recent figures announced by Formula 1 Group reported the losses after payments made to teams. Overall revenue dropped by 44 percent from $2.022 billion to $1.145 billion with just 17 races held amid the coronavirus crisis. F1 had initially planned to have 22 races last season, but a truncated campaign meant only 17 races were completed.
This drop in revenue has also resulted in a pay cut in the salaries of drivers. Lewis Hamilton who was the highest earner under his previous deal used to earn around $40 million per year. There was speculation surrounding Hamilton’s future at Mercedes, but he eventually decided to work with the same team for the 2021 season. Hamilton has agreed to sign only a one-year contract extension and has accepted a reduction in his fee to $30 million. The reported wage cut is in the region of $1 million per race.
Hamilton is not the only one who has taken a pay cut. Aston Martin is believed to be paying four-time champion Sebastian Vettel half of what he earned in his final season at Ferrari. Last year, Hamilton admitted he did not feel comfortable negotiating a “big contract” while so many people were losing their jobs due to the global pandemic. The British racer has made an outstanding start to the new campaign by winning Bahrain GP last month. He is currently gearing up for Italian GP later this month. The season usually begins with Australian GP, but the pandemic forced F1 to change the schedule.