What’s behind the delay in cancelling the Qatar and Abu Dhabi GPs?
Given the ongoing conflict in the Middle East, for several months now it’s been assumed that the cancellation of the season-closing Qatar and Abu Dhabi Grands Prix is not just likely, but inevitable.
The commercial rights holder has been making contingency plans while outwardly maintaining that these races are still on. Many in the F1 paddock have followed suit: the hotels in the Imola vicinity are almost fully booked for the weekend occupied by the Abu Dhabi round.
Despite the assumption that Qatar and Abu Dhabi will inevitably be cancelled, the promoters of those races remain outwardly determined that they will go ahead as planned. Abu Dhabi has gone as far as announcing music acts including Zara Larsson, The Script, Imagine Dragons and Lewis Capaldi. Those who set store by what people say on social media will note that Larsson has subsequently claimed she will not be going.
This is all part of an ongoing dance over who will pick up the tab. Broadly speaking, when promoters cancel races, they are the parties who end up out of pocket since their contracts with F1 oblige them to pay the sanctioning fee anyway. If the commercial rights holder cancels the races, it forfeits those fees.
The sanctioning fees for Qatar and Abu Dhabi have been widely reported as $55million and $40million per year respectively, but it’s understood that these figures are highly speculative. Nevertheless, the sums involved are significant.
Contracts vary between promoters, especially those races which are backed by states rather than conventional commercial entities. But when events are cancelled and money is lost, there will always be a tussle over liability – especially when cancellations are enforced by outside circumstances.
Such is the commercial value of hospitality, trackside signage and other sponsorships that the potential financial fallout extends well beyond the sanctioning fees. That is why Bahrain is hosting its race in Malaysia, in effect renting the circuit so that both it and F1 can fulfil their contractual obligations.
F1 is going to Malaysia for the Bahrain GP this year
Photo by: Peter J Fox / Getty Images
“We will take the decision at the right time,” said F1 CEO Stefano Domenicali at the end of July. “That moment will be not before the middle of September. For us today, the races in Qatar and Abu Dhabi are confirmed.
“By the way, they are already sold out. That is an incredible sign of how much the sport is bigger than the problem that our world is living. But of course, if the situation would not be clearer the way that we believe it should be, before the middle of September, we will take the decision.”
Besides showing a rather tone-deaf perspective on F1’s importance in relation to geopolitics, this pronouncement also muddied the picture of when the decision would be made: before or after the middle of September? Either way, this date has now passed.
Domenicali also confirmed that if the final two rounds were cancelled, the season would not end with a double-header in Las Vegas. Despite some sources still claiming such an event is likely, it is not. F1 already has to tread carefully around the other Las Vegas stakeholders and it is understood that holding back-to-back events there would definitely not be welcomed by the local business community. A double-header would also clash with the Thanksgiving holiday.
The requirement to find a home for a final round in the event of the Qatar and Abu Dhabi GPs not happening is also contractual. As it stands, if they were to disappear from the calendar, F1 would be left with 22 rounds. While this would enable it to fulfil the majority of its broadcast contracts, it’s understood that at least one stipulates 23.
Imola was viewed as a shoo-in for the season finale but, during the Italian Grand Prix weekend, it emerged that F1 has experienced significant pushback from Qatar and Abu Dhabi regarding the cancellation of their rounds. The most commercially satisfactory outcome would be for the putative round in Imola to be a proxy race for one of them, as per the Bahrain Grand Prix in Malaysia.
Imola is poised to host an impromptu F1 finale
Photo by: Steven Tee / Motorsport Images
But it is understood that both Qatar and Abu Dhabi are determined to present a picture of business as usual, given both have invested significantly in establishing their airports as major international travel hubs.
Difficult days therefore lie ahead for the commercial rights holder, since it will be required to make a decision soon for logistical reasons. In its quest to reach net zero emissions by 2030, F1 now transports a great deal of equipment via sea. This naturally means longer lead times.
Beyond the timescales involved in sea-freighting infrastructure to the Gulf region, there is the practical question of it having to pass through the Strait of Hormuz, a chokepoint which opens and closes depending on the state of hostilities between Iran and the USA. Should the final rounds remain as presently scheduled, more freight would have to go by air, increasing costs as well as emissions.
And while this game of brinksmanship evolves between the commercial rights holder and the Middle Eastern promoters, the teams also have questions to ask. If they are required to transport equipment and personnel to locations which have been proximate to military targets in an ongoing conflict, their insurance is unlikely to cover them.
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