Abu Dhabi promoters dig in as FOM walks a tightrope over hosting fees worth tens of millions
The protracted silence over whether Formula 1 will race in Qatar and Abu Dhabi this December is not simply about security logistics. At the heart of the delay lies a financial standoff between Formula One Management and the Middle Eastern race promoters, with hosting fees worth tens of millions of dollars hanging on who blinks first.
The financial standoff between Formula One Management (FOM) and the Abu Dhabi race promoters continues, with hosting fees worth tens of millions of dollars at the center of the dispute. If the promoters are the ones to cancel, FOM would still be required to pay significant hosting fees. Conversely, if FOM decides to cancel first, it would forfeit those payments. Both parties are hesitant to make the first move, reminiscent of the delayed decisions during the pandemic.
The financial stakes are substantial, with Qatar and Abu Dhabi paying the highest hosting fees on the calendar, at around $55 million and $42 million respectively annually. Together, these fees account for nearly $100 million in annual revenue for FOM. The total financial impact extends beyond the hosting fees, as cancellations of Bahrain and Saudi Arabia races in April are estimated to have cost the organization between $190 to $200 million, including an estimated $80 million in lost EBITDA.
F1 CEO Stefano Domenicali initially set mid-September as the deadline for a decision, but the situation has remained unresolved beyond that date. The financial consequences of being the first to cancel have yet to be absorbed.
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