Tuesday, September 27, 2011

F1 Takes Your Breath, And Money, Away

Last year, the F1 Night Race pulled in incremental tourism receipts of $160 million. This year the Singapore Tourism Board expects only $100 million. Gold is already losing its lustre amidst the uncertainty plaguing the global economy, with all signs pointing at 2012 as a possible annus horribilis. It is a no brainer that Second Minister for Trade and Industry S Iswaran said Singapore will not rush into a decision to extend the F1 contract for another 5 years. Somewhere hidden in the overdue accounting is the loss in retail revenue due to the Marina Bay area road closures, and opportunity cost of business interruption and traffic congestion. It's time they stop hearing only the good stuff, especially from the ones who really profit from the exercise.

Just listen to Melbourne's Lord Mayor Robert Doyle who unleashed a stinging attack on the grand prix in the Sunday Herald Sun, warning that annual losses would soon hit the $70 million AUD mark and stating that the event no longer represents value for money for Victoria's state government. He contends that for taxpayers' pockets, enough is enough and that patience with F1's escalating financial demands is wearing thin.

“First, F1 supremo Bernie Ecclestone will pick up his bat and ball and go home,” mused Mr. Doyle. “Despite best endeavours, the notoriously difficult, contentious and cranky Bernie will take the dollars of either an Asian or oil-rich Middle Eastern state. There will be no successful negotiation. End of story."

According to Time Magazine ("Turbulent Times Of Formula One", 15 March 2010), Ecclestone alone makes the big TV, sponsorship and track deals that keep F1's cash gushing. It is no secret that Ecclestone the Hitler fan ( "could command a lot of people" and was "able to get things done" ), is the only one guaranteed to make a killing from the F1 races. Formula Money, the book which reviews Formula 1's financials, records this: "In 2008, its first year, the race took in $51 million, but cost $100 million. The (Singapore) government kicked in $60 million, leaving the promoter with a tidy profit."

Obviously Iswaran is no Doyle, and he's hiring independent consultants to take a hard look at (and take the fall for) the value of the F1 race in terms of tourist dollar and economic spin-offs. The Minister is not about to stick his neck out for the inconvenient truth when the old geezers are having so much fun at the taxpayers' expense.
"could command a lot of people" and "able to get things done"


  1. why some people are paid millions with a group of think tank behind them and still need to hire independent consultant to make decision ?!

    If you work in a company and your boss ask you for a proposal. If you tell him you need to hire a independent consultant before you can make the decision. He will definitely show you the door !

    What a cushy job our A team has ... I also want, can ?

  2. F1-Casino-Yatch Race etc are just fancy shows and entertainment to keep the rich 'foreign devils' entertained, nothing to do with 'conservation' of wholesome family wholesome time for local singaporeans, except for small elite group. Surprised this is not scrap yet. I mean, if a small $1m halloween event can be canceled for 'non-profitability' why won't a $150m expenses with little spillover effects? Oh yeah, becos these are 'small change' compared to billions lost by our GIC who have 'long term' interests.

    To put it mildly but loudly, F1 not only takes our breadth and money away, it also took our hearing too.

  3. If I recall correctly, the ST reported last week that F1 is paid US35 million for each race. For the 3 days of F1, it means we pay Bernie US$12 million A DAY to have a holiday in Singapore! No wonder the PAP thinks that the President's $4 million a year salary is nothing. I think that F1 should be paying Singapore for the pleasure of hosting it here, since the TV rights moneys are collected by them!

  4. So long as Singaporeans enjoy them, bring them in! F1, Olympics, Yatch/Boat Races, Beauty Pageants, Stripped All Shows, Bull and Cock Fights, Talent Shows and what not.
    Singaporeans need the thrills; living is boring otherwise in Sin.
    Such events do create jobs for some who are otherwise unemployed.


  5. Never mind if it loses money, just as long as it allows LKY to 'punch above his own weight'. After all, it is not his money that is being lost.

  6. Actually patriot is right. As long as it brings tourism money and jobs here for local suppliers, why not. The only condition I want to ask is : how does any or all these world events contribute to the humanity or well0being of the people other than dollars and cents for the profit-makers. What's the soul objective to such purposes? The only charity event I read about is the children cancer charity raised by Ritz Carlton during the F1 show. What did the President do to use his mileage and goodwill to generate more dollars for the needy here? After all, is a once a year event where all the rich, famous and who's who in town to lend their star power and incredible wealth. Apart from the vices like prostitution and casinos, what are they doing to help the poor or needy? For a PResident who claims to have the world experience in economics and finance, and wants to do more for the people, I don't see HUGE MISSED OPPORTUNITY.

  7. ST reports that revenue from the races goes to Formula One Group (Ecclestone) and Singapore GP (Ong Beng Seng). Since Ecclestone is guaranteed a profit because of the structure of the deal, Ong Beng Seng stands to benefit most from the $90 million Government subsidy. Why should taxpayers pay to make Ong Beng Seng richer? What is so special about Ong Beng Seng?

  8. I love having F1 Holidays. It could be costly but it's worth it. There are cheap deals available too.

  9. Nice picture and giving all the details about Singapore Grand Prix. We have a singapore f1 night race 20122012 please watch It.