Abu Dhabi promoters dig in as FOM walks a tightrope over hosting fees worth tens of millions

The situation is between the commercial rights holder and the promoters. If the promoters are the ones to cancel, significant hosting fees remain payable to FOM. If FOM pulls the plug first, it forfeits those payments. Neither side, it appears, wants to make the first move and has echoes to the same way races were either cancelled or postponed during the pandemic.

The sums involved are substantial. Qatar and Saudi Arabia are understood to pay the joint-highest hosting fees on the calendar, at approximately $55 million per year each, while Abu Dhabi's annual fee is estimated at around $42 million. Together, the Qatar and Abu Dhabi hosting fees alone represent close to $100 million in annual revenue for FOM.

The total financial exposure extends well beyond the hosting cheque. When Bahrain and Saudi Arabia were cancelled in April, a Guggenheim Partners analyst note estimated the total revenue impact at $190 to $200 million, including approximately $80 million in lost EBITDA, according to Sportico. Hospitality, Paddock Club income, and event sponsorships all compound the blow when a race does not take place.

F1 CEO Stefano Domenicali had initially set mid-September as the deadline for a decision. "However, if the situation is not sufficiently clear by mid-September, then we will decide," he said. That deadline has now passed without a public announcement.

Formula 1 is far from the only championship pulling back from the region. The WRC confirmed on September 18 that Rally Saudi Arabia has been cancelled, with the season now ending at Rally Sardinia in October.

The WEC scrapped both its Qatar and Bahrain rounds in July, relocating them to Barcelona and Monza. F1 itself already lost the Bahrain and Saudi Arabian Grands Prix in April, with the Bahrain race later relocated to Malaysia.

Abu Dhabi's promoters, however, continue to act as if their race will go ahead. Abu Dhabi officials were present at the Spanish Grand Prix in Madrid and as GPblog has previously reported, the Yas Marina Circuit is still selling tickets and promoting entertainment acts, and behind the scenes while driver safety will not be compromised, Imola is already being prepared as a backstop, with hotels across the wider area fully booked by F1 personnel and a December 6 race date expected.

The question is who will absorb the financial consequences of being the first to say so publicly.