Have we done enough for Formula One?

  • Business
  • Wednesday, 26 Oct 2016

Some years ago, a group of editors in Malaysia was having dinner with the late Lee Kuan Yew, the then senior minister of Singapore.

The discussion was lively and one of the topics that came up was Formula One (F1).

Lee, according to an editor who was present, said Singapore had the chance to organise a leg of the F1 circuit around the same time Malaysia took up the offer.

The story goes that Lee turned down that offer and realised it was a big mistake after seeing the success Malaysia had with hosting the F1 race at Sepang. Fast forward that regret and when Singapore had another chance to host the race, it grabbed the opportunity.

Malaysia has hosted the F1 race since 1999. At that time, it was a big deal. Malaysia was only the second country in Asia apart from Japan to have the right to host an F1 race, known as a Grand Prix.

Today, there are 21 Grand Prix races on the F1 calender and there is great competition to host a leg. It is no secret that hosting a Grand Prix costs money and the Malaysian Government, apart from building a circuit, has to pay a sum of money every year to host the race. Last year, that amount was US$55mil.

There is no breakdown as to whether the F1 race is profitable for the Sepang International Circuit (SIC). Based on the last submitted accounts to the Companies Commission of Malaysia, SIC, which rents its track for other events, made a profit of RM8.5mil for its 2014 financial year. SIC earned a profit of RM17.2mil in 2013.

But the Grand Prix in Sepang is not a bottomless pit, even with the great cost of hosting a race. There are spillover effects on to other parts of the economy that will bring in money to the country. Tourism gets a boost and the race will bring about a spike in spending that helps the economy.

The role of Petroliam Nasional Bhd (Petronas) is noticeable in the F1 with its involvement in the leading Mercedes AMG Petronas Formula One Team and the gross media exposure is worth around US$900mil. Petronas is the title sponsor of the race in Sepang.

After 18 Grand Prix races at Sepang, many now are lamenting about dwindling ticket sales, poor turnout and a low TV audience for the Sepang Grand Prix.

There are a number of issues that have caused the anaemic interest, but one is that motorsports in Malaysia, especially the four-wheel variety, has been let down by the authorities. In the past, the public had access to the Batu Tiga circuit in Shah Alam.

It was not as grand or shiny as Sepang but it was in the Klang Valley, affordable for weekend races and served the grassroot development of motorsports in Malaysia.

That track is no more, with the asphalt and gravel traps giving way to a housing estate in 2003.

But a replacement low-cost circuit was never built, permanently depriving the public of a race track that could have served to nurture interest in the sport from a layman’s perspective.

The other is that Sepang is no longer unique in Asia. There are now six Grand Prix races in Asia and this year, the Singapore, Malaysia and Japanese Grand Prix all hosted a race over a span of just a tick more than a month.

With so many races in Asia packed so close to each other, there is also going to be lethargy from travelling fans who now have a choice as to which leg they might want to go for. The other is promotion. Marketing and promoting a Grand Prix is important and without that, there will not be a buzz. Noticeably absent in recent years is a coordinated marketing and promotion plan when Sepang hosts the Grand Prix.

There are no big sales being organised and neither are there shows and concerts that can pull in the crowd.

Just look at how Singapore has marketed its Grand Prix and wonder why can’t we do the same? Surely, it is worth giving that a shot before any decision is made on the race’s future.

The other missed opportunity is to turn Sepang into a night race. Yes, it would have cost a bit more money, but what that would have accomplished is to put a new spin on the race at Sepang.

While there are calls to give up the rights to host an F1 race, many need to know that once the Grand Prix is given up, the odds of regaining a spot on the calender is slim to none, unless some serious big money is once again thrown at the direction of the race organisers.

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