Economic Effect due to Bahrain GP Cancellation

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F1 to lose $100m from Bahrain Grand Prix cancellation

The new financial data, collected from F1 trade guide Formula Money, has been compiled after the Sakhir event was called off due to civil unrest in the country.

Some of the biggest losers will be F1's 12 teams since it is believed there are penalty clauses in their contracts with sponsors that would be triggered by missing a race.

Data from F1's trade guide, Formula Money, show that the teams are expected to lose an estimated $40m from missing Bahrain, with Ferrari set for the biggest fall at $11m. The Italian team receives more income from sponsorship than any of its rivals and so it stands to lose more from the race being scrapped.

The biggest-spending sponsor on the grand prix is Bahrain's national airline Gulf Air, which pays an estimated $6m for naming rights to the race. Its fee comprises around half of the total income from advertisers at the circuit and will leave a big hole in the pockets of CVC, the private equity firm that majority-owns F1's rights-holder, Formula One Administration (FOA). After already paying for tonnes of freight to be dispatched to the Gulf state; the shipment will now be redirected to Australia.

The revenue from advertising at F1 circuits is received by FOA, which also gets the race hosting fees.

Bahrain pay £25 million to host the grand prix, plus an additional £12 million to guarantee it is the first of the new season. Bahrain's royal family pays an estimated US$40 million but FOA's chief executive, Bernie Ecclestone, has waived the fee since the race will not be taking place.

"The fee that is normally being paid for the event is not being paid," he said.

"I am not charging them for a race they are not getting. Whether they are covered by their insurers for loss of revenues, ticket sales, etc. I am not sure, but if anything is force majeure then that is. It is similar to if an earthquake had struck. No-one could have foreseen that a month ago. If and when it is rescheduled they will pay their usual fee."