June 19, 2009 / 1:04 PM / 9 years ago

Formula One to feel the pinch if teams break away

SILVERSTONE, England (Reuters) - Teams will take more than $2 billion (1.2 billion pounds) of annual investment with them if they leave the FIA Formula One championship and set up their own series, according to industry monitor Formula Money.

BMW-Sauber, Brawn, Ferrari, McLaren, Renault, Red Bull and Toro Rosso and Toyota announced on Thursday that they would start preparations for their own championship after a row over the 2010 rules laid down by the governing International Automobile Federation.

Formula Money calculated that the eight teams accounted for 47 percent of Formula One’s total revenue generation in 2008 through sponsorship, supplier deals and team owner contributions.

Of the total $2.2 billion, $667 million was in the form of sponsorship revenues.

The report said Formula One could expect the crisis to have an immediate effect with fans less likely to book advance tickets for next year.

“This could make it more difficult for race promoters to pay F1’s hosting fees which average $23.7 million per race,” it added.

Television stations are also likely to want to renegotiate their contracts, or could even terminate them, if the likes of Ferrari are no longer competing in the officially-sanctioned championship.

“These teams also spend huge amounts on F1’s corporate hospitality and on trackside advertising so their departure will further impact F1’s revenue stream,” said Formula Money, which said the sport needed around $550 million in annual revenues to meet its costs and liabilities.

Reporting by Alan Baldwin, editing by Kevin Fylan

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