Will Singapore Stick With Formula One?
SEPTEMBER 28, 2011, 11:59 PM ET
Ferrari driver Felipe Massa during last Sunday’s Singapore Grand Prix.
Getty Images
As cars zoomed past the finish line and fireworks lit the sky above the race track last weekend, fans of the Singapore F1 night race, held for the fourth time this year, were left wondering how long the glitz and glamour will continue to grace the island. The Singapore government is still mulling over whether to renew its contract with F1′s international management which expires in 2012.
Speaking after the conclusion of this year’s F1 race on Sunday, Singapore’s Second Minister for Trade and Industry S. Iswaran said there was “no hurry” to extend the race beyond the current contract, adding that the government “should deliberate and be measured” in the way it goes about negotiations.
Even if Singapore decides not to renew its contract with Formula One Management, the agent and business manager of the sport, they would still have to host two more races after the expiration of the contract, until 2014.
So why would Singapore even think of ending its association with the popular race, which draws big crowds — and lots of international attention — to the city-state? F1 has pumped massive amounts of tourism dollars into Singapore’s economy every year since the first night race in 2008. Last year’s race brought in US$132 million, with similar figures expected this year. It costs US$115 million annually to stage the event, with the Singapore government footing about 60 percent of the bill, according to figures from the Singapore Tourism Board. Local hotelier and entrepreneur Ong Beng Seng, who brought the race to Singapore, is responsible for the rest.
In his statement, Mr. Iswaran noted that more than 110,000 visitors have come to Singapore because of the F1 race in the past three years, resulting in an “excess of S$400 million in incremental tourism receipts.” An estimated 320 million people have watched the race on televisions across the globe in the past three years. “F1 has been good to Singapore… and Singapore has been good for the F1,” said Mr. Iswaran.
But not all sectors of the population agree with him, and indeed, the decision is as much a political one as an economic one. In a letter sent to the Straits Times Forum, published online, one Singapore resident wrote that he could not wait “to see the end of F1 in Singapore.” The writer griped about the “lost revenue suffered by shops and eateries, and traffic congestion caused by road closures” as well as the “enormous carbon footprint” left behind by the race.
Opposition parties, too, have been quick to criticize the decision to host the race. A statement by the Singapore Democratic Party last week said the race was an example of the government’s attempts to turn Singapore into “a playground for the rich,” while “sacrificing the interests of Singaporeans.”
“For most Singaporeans, the F1 remains out of reach,” the statement continued. Prices of standard tickets for the three-day event this year cost anywhere between US$152 to US$3,122. Tickets to the exclusive VIP Paddock Club cost US$7, 500 per night.
Whether those criticisms sway Singapore officials remains to be seen. The decision will be made between the organizers of the Singapore Grand Prix and the FOM before the start of next year’s race in September 2012. The government seldom polls Singaporeans on such decisions, but according to media reports has engaged independent consultants to get a clearer idea of the value of F1 to Singapore.
Credit: The Wall Street Journal (wsj.com)
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