Liberty boss admits closed door events pose 'economic' challenge to F1

Liberty Media CEO Greg Maffei says F1 will most likely resort to running behind closed doors when the coast is clear, but such a scenario isn't without its economic challenges for the sport and its teams.

Grand Prix racing has yet to kick off its 2020 season, the sport pinned down by the global COVID-19 pandemic and its effects on world economies. And when F1 will finally raises the curtain on its disrupted 2020 is still unclear.

But Maffei confirmed the most likely scenario of F1 resuming with races held without spectators.

• Silverstone could 'absolutely' hold two races behind closed doors

"Chase Carey and his team have run scenarios from no races to 15 to 18, and I think the most likely scenario is we most likely begin somewhere in western Europe, with no fans," explained Maffei, speaking to CNBC.

"That is obviously a good way to start for the safety of the teams and for the safety of the fans, but it's probably less attractive both economically for Formula 1 but perhaps even more importantly for our teams, because the teams really need to see profits from us so they can afford to keep themselves running.

"They will get a share of the profits, and to the degree that we are running low or no-profit races there may not be sufficient capital to keep them going.

"So we're trying to balance the needs for fans, obviously first and foremost the safety of fans and the teams, but also how do we run races which are economically attractive, not only for Formula 1 but for the teams themselves.

"Chase and his team are working on that but I suspect it starts with a western European start with no fans."

While many fans have diverted their attention during the pause to the Esports arena, the current lack of real life sporting entertainment has left most everyone longing for some live action.

Maffei suggests the prolonged hiatus could actually provide an opportunity for F1 to tap into new audiences when life returns to normal.

"Formula 1 has the benefit of being the fastest growing sport on social media, it has the benefit of expanding its interest widely from things like the Netflix series 'Drive to Survive'," said the Liberty chief executive.

"In this time of no sports, those kinds of events are even getting more attention.

"People are starved, and I think when we do open up, we're going to see a lot of increased interest in Formula 1."

Maffei was interviewed by CNBC in the context of a shift of assets between Liberty Media's Sirius XM Group and The Formula One Group that was announced on Thursday.

The reallocation by Liberty reattributed $1.5 billion in net asset value to F1 while reducing its debt and moving a net $1.4 billion in cash to the latter as it shed its stake in troubled Live Nation Entertainment.

In a call with investors, Maffei said the move "reduces the risk to investors" by separating two companies -Formula One and Live Nation - that rely on live events that have been postponed due to the global coronavirus crisis.

Maffai said the massive $1.4 billion lifeline will prove crucial in helping F1 "preserve the health of its ecosystem".

The Formula One Group's stock which is quoted on the Nasdaq was up 15% mid-day in New York on the news.

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