On Saturday Formula 1 (F1) announced the decision to cancel the Bahrain and Saudi Arabia Grands Prix due to the conflict in the Middle East.

While the human cost of the conflict is immeasurable and far outweighs any sporting consideration, the cancellation of multiple races will nonetheless have significant consequences for F1.

The sport is reported to face losses in excess of £100m as a result of the cancelled races – a figure that is likely to be substantially higher once sponsor compensation and other stakeholder claims are factored in, given the loss of value arising from a shortened season.

Depending on how the war unfolds, cancellations to further races could follow – in particular rounds 23 and 24, in Qatar and Abu Dhabi, could be at risk.

Mass race cancellations are not unprecedented, with the Covid pandemic resulting in races being cancelled or held behind closed doors. The prospect of a reduced racing calendar has therefore been front of mind for stakeholders negotiating contracts with rightsholders including F1 and the teams in recent years.

This has led to sophisticated stakeholders – in particular drivers, sponsors and broadcasters – digging into the force majeure provisions in their contracts with rightsholders, which can relieve a party of its obligations if they are unable to perform due to circumstances outside of its control. Sponsors and broadcasters will often try to negotiate these clauses to ensure they are entitled to a pro-rata refund of the fee for the affected Season if races are cancelled, while drivers will be keen to ensure their fee is unaffected by circumstances outside of their control.

Rightsholders will be reluctant to make these changes, given the loss of income, and there will be many cases where unequal bargaining power, or a willingness to get the deal done will leave parties who signed up to rightsholders’ standard terms without legal recourse.

While many cases will be resolved on a commercial level, with substitute rights granted at other races to maintain partnerships and key relationships in a sport that is notoriously a “small world”, the soaring commercial success of F1 and the ever increasing values of commercial deals means it would be unsurprising if the 2026 Season is marred by high-profile litigation.

Brands negotiating new sponsorship agreements with sports rights holders (including F1 teams), or renewing existing arrangements for the 2027 Season onwards, will now be minded to dig into force majeure provisions to ensure there is a satisfactory mechanism – which may include substitute rights or expert determination of the value of the lost rights – to ensure their interests are protected if races are cancelled.

AUTHORS

Mike Glover-Smith Associate

Mike is a sports and entertainment industry lawyer with experience working for a Formula 1 team.

Mike is a sports and entertainment industry lawyer with experience working for a Formula 1 team.

Mike supports clients including teams, athletes, agents and brands, with a particular focus on motorsports and football. He advises on a broad range of commercial, intellectual property and sporting matters including high-value sponsorships and commercial endorsements, merchandise and licensing matters, fan engagement initiatives and media rights.

Mike joined the firm from Atlassian Williams Racing where he advised the team on a broad range of sports, commercial and IP matters. Prior to this he trained at Taylor Wessing, completing a secondment to Amazon before qualifying as an associate.