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I would be more concerned about how many teams might still be able to participate with a 7 month layoff.
Virgin is looking for a government loan/bailout, it’s international capacity is now down to zero, and domestic is at less than half. On top of standing down 8,000+ employees from its flight crews and terminal teams. If the business doesn’t ramp up again soon, it may not be in a position to return to full service. Meaning the income to VASC, and the flights package could (if they haven’t already) completely stop.
We have seen in the news most recently around the NRL having stopped receiving payments from its FTA broadcaster in #9 because there is no series being broadcast. It is not beyond the realms of possibility that either Fox and/or #10 would consider (if they haven’t already done it) halting payments to VASC for lack of content.
In both those scenarios, money to teams from VASC will likely be restricted/stop.
The other challenge for teams is around their own commercial platforms.
888RE sells parts to other teams, so does KRE Engines, WAU Engines, SupaShock, the merchandise purveyors, Dunlop Racing etc etc
No racing means no using up engines, no income, and at some point, a staff reduction possibility in those enterprises as a logical conclusion.
Team sponsorships may also be at risk, even if there is a legal contractual obligation to pay, how solid is the business model now so many industries are in lockdown. I can think of one sponsor at least that is in startup, relying on the hospitality industry, and to a lesser extent the retail sector, both of which are either turned off completely, or a shadow of their former selves. Plus those squads relying on multiple partners for individual round sponsorships. No rounds no cash.
While it’s true the consumables don’t get burned up when a round doesn’t run, the people touching the oily bits are still there, expecting a pay check, so are the landlords who rent the teams their workshops, so are the finance companies leasing them their trailers, so are any of the businesses they contract a supply of equipment to that at the moment aren’t nscessary and won’t be getting paid.
We have already seen that NRL players are being told their compensation packages will be substantially reduced in this COVID19 world. What does that show up like for the starts of our favourite sport who also earn more than the average wage to perform 15 or so weekends a year?
Or equally the liabilities the contributing drivers have to make.. are they contractually bound to keep paying despite no racing, or are their force majeure clauses strong enough to prevent it.. with other downstream consequences for teams..
Stand downs or taking annual leave in all these spaces are possible. And happening already. And crying out for new work in some cases. Except.. if there is 7 months in this.. the game is up.. and people will have to be exited. There is no other choice.
If the money stops coming in the door, and it still leaving the door.. the grim reality is likely to be a significant change in the series from his the year started.
The teams supported by patrons might be okay in this scenario.
The ones that are not.. will have some significant risks to their operating capabilities
We haven’t seen Archer Capital Comment on this as yet... they may be able to help with ex-gratia payments, or even with possibly providing loans against the RECs at discounted rates, to keep the show rolling.
The show goes on. Maybe. It is a genuine risk that it might not too.
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