Sin­ga­pore in the driv­ing seat as it ne­go­ti­ates new F1 deal

Kuwait Times - - SPORTS -

After ne­go­ti­at­ing Sin­ga­pore’s cur­rent For­mula One deal, Bernie Ec­cle­stone said in 2012 the hard­est thing was ex­plain­ing to the au­thor­i­ties that “we don’t race for free”.

Four years on, the F1 boss ap­pears to be frus­trated again as he tries to keep one of the most glam­orous races on the cal­en­dar after the con­tract ex­pires in 2017, at a time when the city-state is weigh­ing whether the event makes eco­nomic sense any­more.

With its tourism in­dus­try in­creas­ingly di­ver­si­fied, a stronger coun­try brand than when it first hosted the event in 2008 and other ma­jor sport­ing events in the bag, Sin­ga­pore seems to have the up­per hand in the talks with F1.

More­over, Ec­cle­stone and F1’s new own­ers, US ca­ble TV mogul John Malone’s Lib­erty Me­dia, face a new risk: with Malaysia pulling out of a new deal, they could al­to­gether lose their pres­ence in South­east Asia, one of the world’s fastest­grow­ing re­gions.

F1’s 86-year-old com­mer­cial supremo first told German mag­a­zine Auto Mo­tor und Sport that Sin­ga­pore does not want to host F1 any­more, then clar­i­fied he did not want to lose Sin­ga­pore. His com­ments sug­gest talks get­ting tougher.

“I think Sin­ga­pore has come in and ne­go­ti­ated hard and has re­alised they are in a po­si­tion of strength to do so,” said James Wal­ton, head of the Sports Busi­ness ser­vice line at Deloitte Sin­ga­pore and South­east Asia.

“This is one of the top ranked grand prix ... and one of the markets that the key spon­sors of F1 are most in­ter­ested in.” Sin­ga­pore’s govern­ment funds 60 per­cent of the S$150 mil­lion ($105.13 mil­lion) it costs to host the race each year. An­a­lysts say the city-state is weigh­ing the costs, and ben­e­fits, of stag­ing the event in the fu­ture.

Sin­ga­pore GP, the event’s or­gan­iser, said it would not com­ment on “on­go­ing com­mer­cial ne­go­ti­a­tions”. A de­ci­sion is ex­pected be­fore year-end, Ec­cle­stone has said. The Sin­ga­pore race is one of the most pop­u­lar, tak­ing place at night on a street cir­cuit with spec­ta­tors en­ter­tained by mu­sic acts such as Beyonce and Justin Bieber, while TV watch­ers get a bird’s-eye view of the glitzy sky­line.

As a top wealth man­age­ment hub, the city-state is a nat­u­ral draw for the re­gion’s af­flu­ent peo­ple, a key tar­get of For­mula One spon­sors such as Hugo Boss and Tag Heuer, a lux­ury LVMH brand. But the sig­nif­i­cance of that is big­ger for Ec­cle­stone than for Sin­ga­pore, which also hosts events such as the WTA women’s ten­nis Fi­nals and the Rugby 7s se­ries that bring over 100,000 visi­tors each. While the F1 ini­tially played an im­por­tant role in boost­ing the tourism in­dus­try, Sin­ga­pore has di­ver­si­fied its of­fer­ing, now fo­cus­ing on the emerg­ing mid­dle classes from China, In­dia and In­done­sia. Tourism is ac­tu­ally a bright spot in a slow­ing econ­omy. In the first eight months of this year, be­fore this Septem­ber’s F1 race, the num­ber of visi­tors was up 10.3 per­cent from the same 2015 pe­riod, at 11.3 mil­lion. Tourism re­ceipts grew 12 per­cent to S$11.6 bil­lion ($8.1 bil­lion) in the first half of 2016.

To be sure, Sin­ga­pore has ben­e­fited from host­ing F1. Since the 2008 de­but race, the event has gen­er­ated S$150 mil­lion in tourism re­ceipts every year on av­er­age, ex­cept for 2009 at the height of the global fi­nan­cial cri­sis.

But about 80 per­cent of the spend­ing gets re­cy­cled into the econ­omy, with lo­cal firms hired for cir­cuit set-up, tick­et­ing and se­cu­rity, the Sin­ga­pore Tourism Board says. “In these eco­nomic times, every or­der book is im­por­tant and I believe this is not a small or­der book,” said Kurt Wee, Pres­i­dent of the As­so­ci­a­tion of Small & Medium En­ter­prises. He added though that “ev­ery­body would un­der­stand that the event has to be sus­tain­able”. And that is where Sin­ga­pore has another ar­gu­ment. At­ten­dance, which topped 100,000 on all three days in the first year, has de­clined, with this year’s race av­er­ag­ing 73,000 spec­ta­tors for each day, down from 87,000 in 2015.

With the global econ­omy slow­ing, the numbers might fall fur­ther and a five-year com­mit­ment may not be so ap­peal­ing, although this may be off­set in the fu­ture by Malaysia pulling out as F1 fans in the re­gion would have only one nearby op­tion. “If you think of the govern­ment as a busi­ness, I think they have to man­age their funds pru­dently to get the most bang for their buck,” said ANZ econ­o­mist Wei­wen Ng.— Reuters

BOS­TON: Tuukka Rask #40 of the Bos­ton Bruins makes a save against the St. Louis Blues as team­mate John-Michael Liles #26 clears the re­bound dur­ing the sec­ond pe­riod at TD Gar­den on Tues­day in Bos­ton, Mas­sachusetts. The Blues won 4-2. —AFP

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