Skip to main content

Advertisement

Advertisement

The Big Read: F1 hits a chicane, but ‘the magic’s still there’

SINGAPORE — The tyre marks on the roads around Marina Bay have hardly disappeared, and the barriers around one of Formula One’s iconic circuits have yet to come down fully, but already, the seminal race has arrived at a crossroads.

Formula One drivers in action during the Singapore F1 Grand Prix. Photo: Singapore GP

Formula One drivers in action during the Singapore F1 Grand Prix. Photo: Singapore GP

Follow TODAY on WhatsApp

SINGAPORE — The tyre marks on the roads around Marina Bay have hardly disappeared, and the barriers around one of Formula One’s iconic circuits have yet to come down fully, but already, the seminal race has arrived at a crossroads.

Change was in the air ahead of the race last Sunday, after news broke early this month that American media and telecommunications firm Liberty Media had launched an US$8 billion (S$11 billion) takeover of Formula One. To add to the sense that the sands were shifting, talk around the circuit as race weekend approached swirled around speculation over whether negotiations to extend the Singapore race when its five-year deal expires next year would be concluded successfully.

Most startlingly, the champagne had barely dried on race winner Nico Rosberg’s racing suit when news emerged that the 2016 edition of the Singapore race performed poorly at the box office: Ticket sales were the poorest in the nine years since the howl of F1 engines was first heard in the city centre.

Race promoters Singapore GP reported that overall ticket take-up was 15 per cent lower than average attendance since 2008.

Daily attendance around the Marina Bay circuit was 73,000, while the three-day total was pegged at 219,000 – lower, even, than during the 2009 financial crisis.

The first question, then, is whether Singapore is still, as F1 supremo Bernie Ecclestone said, the sport’s “crown jewel”.

Of that, at least, there is little doubt. Analysts and experts whom TODAY spoke to believe the ticket numbers are just a minor blip. Glowing accolades from fans, F1 teams and drivers, put paid to any doubts over Singapore’s place on the 21-race calendar.

F1’s new chairman Chase Carey is among the believers.

The 62-year-old, who was in town for the race weekend, told formula1.com: “Singapore, certainly, is amazing. The race is great - that’s the core - but it is really a week-long extravaganza with music and entertainment.

“That’s really what it is about - great events. So there you have the three: the cars and technology, the stars, and the events - the live experience.”

Drivers, too, continue to sing the praises of the demanding 23-turn Marina Bay circuit.

As Red Bull Racing’s Daniel Ricciardo said: “The race is unique, the circuit is physically demanding, but it’s a real night race and we work on a (European time) schedule that no other race works on, going to bed at 4am, eating dinner at 2am.

“It’s pretty unique, I think the whole city loves it as well.”

Sauber’s Marcus Ericsson agreed. “I think it’s the hardest race of the year. But I like it, it’s a good challenge and you need to be really on top of your fitness,” he said.

“For me, it’s the toughest but it’s also one of the most enjoyable.”

Cyril Abiteboul, the managing director of Renault Sport Racing, stressed that Asia, and Singapore, is a key location for the team, particularly in the areas of marketing and branding.

“The capacity to engage with customers and tell a story in this part of the world...is very much the reason for us being involved in the sport in F1,” he said.

MORE THAN A RACE DESTINATION

To be sure, though the core of the Singapore Grand Prix is the 250kmh action on the track, the sights, sounds and opportunities that surround it are every bit as important to the race’s success.

Trackside entertainment and the race’s unique location in the heart of the city, which gives fans access to a multitude of dining, entertainment, and partying options around town, are big advantages too.

Then there are those who descend onto Singapore each year and for whom whizzing cars are little more than a curiosity, an aperitif before the main event, so to speak. The Singapore Grand Prix’s hospitality suites continue to attract the movers and shakers of the business world - sponsors, business owners, and investors among the high net-worth individuals here to explore and seal big-money deals.

Anthony Indaimo, Partner and Global Head of Corporate and Commercial at Withersworldwide, an international commercial law firm, told TODAY that Formula One’s rare mix of technology, supercars, entertainment and business-friendly environment are ideal for firms who want to explore deals during F1 weekend.

“Singapore is an important Grand Prix for teams. It is well organised, there’s sponsor involvement and a music festival,” said Mr Indaimo, a corporate lawyer who is a leading advisor to motorsports teams, sponsors, investors, sports agents and drivers.

“There is a pragmatic approach to doing business in F1 in Singapore,” he said, explaining that the hospitality suites and other details make it unlike most other venues elsewhere.

Added Tommaso Volpe, Global Director Motorsport of Infiniti Motor Company, a technical partner of Renault Sport Racing: “The value that Singapore brings to the sport in terms of image and visibility in Asia is huge. Also, the (sponsor) activation around the race during the three days is arguably one of the best in the season.”

And while the Singapore night race costs some S$150 million to organise each year, with the Government co-funding 60 per cent of approved costs, it has also reaped good returns for the Republic.

According to the Singapore Tourism Board, the race generates, on average, nearly S$150 million in incremental tourism receipts each year. Impressively, it has attracted over 350,000 international visitors from 2008 to 2015.

In 2012, experts from the Boston Consulting Group, who were engaged by the Singapore Government to do a cost-benefit analysis on the race, reported that the Singapore Grand Prix would reap S$1 billion in net economic output for the Republic over a 10-year period, with an additional S$1 billion to be earned from increased tourism and investment.

NOW, ABOUT THOSE TICKET SALES...

Despite the accolades, the relatively low ticket sales are a warning light of sorts. Trade and Industry Minister S Iswaran attributed the drop in attendance to economic uncertainty in Singapore and the rest of the world, but added that it was too early to draw any major conclusions.

However, race promoter Singapore GP said that attendance numbers are still “very healthy” compared to other races on the F1 calendar.

Across the Causeway, the Malaysia Grand Prix – which will host its 17th edition at Sepang next weekend – has suffered from poor attendance in recent years, dropping from a total of 120,000 spectators in 2013 to 80,600 last year.

Singapore GP said lower attendances are evident across the board in F1.

It added, however, that spectator numbers at the Padang were “comparable” to numbers in the past seven years, with some 155,000 people turning out for the entertainment offerings over the three-day event. Numbers for the hospitality suites and Paddock Club facilities were similarly healthy, it said.

But industry experts and fans proffer another reason for the dip: They say the tried-and-tested formula of combining on-track action with off-track entertainment needs freshening up.

While noting that the economic downturn and the threat of Zika had some impact on attendance, James Walton, the Clients and Markets Partner and head of the Sports Business service line at Deloitte Singapore and Southeast Asia, pointed out that the 2015 edition had done well despite the haze and a challenging economic outlook. In fact, it had the third-highest attendance figures since the inaugural 2008 edition.

Mr Walton felt that the lower ticket sales were related to a “perceived lack of big-name entertainment acts”. For this year’s event, the performers were Kylie Minogue, Queen & Adam Lambert, and Imagine Dragons.

“Having attractive entertainment acts on Friday and Saturday is particularly important as the qualifying action on the track is not a big draw, with empty seats all around,” he said.

“An Asian act (like Jay Chou in 2012) would also attract more of the local audience, and Sunday night needs a world-class big name act to close the weekend.”

That sentiment was echoed by Singaporean Eugene Toh, who attended the 2015 edition to catch rock band Bon Jovi, but skipped this year’s race because he felt the acts were not big enough.

“I didn’t go because I didn’t like the concert line-up,” said the 46-year-old.

“At the end of the day, F1 tickets are still pretty expensive, just to go there to see cars looping around when you can watch it on TV is not worth it.

“If you want to see action at the paddock, you have to pay a lot of money, and the economy is not doing great.”

But beefing up trackside entertainment to woo the crowds is also increasingly a challenge in a saturated and competitive market, a spokesperson from concert organisers Unusual Entertainment said, adding: “Sometimes, it’s not just about the investments. The star names have to be available and willing to come over, and their performances have to fit a mass genre crowd.

“When there is a demand and the supply is short, naturally the fees will go up. Everyone is fighting for the same pool of big acts.

“As long as the race promoters continue to bring in the hottest and biggest names, while keeping ticket fees reasonable, I am sure non-racing fans would return to F1 again.”

For some others, the lack of big-name acts is less of a barrier than ticket prices. TODAY reader Sangeeta Ram, for example, called for concessional tickets and lower-priced ticket categories to be introduced. The Super Early Bird tickets to the 2017 Singapore Grand Prix are currently priced from S$258 (for the Bay Grandstand) to S$1,688 (for the Turn 3 Premier Grandstand).

“F1 has long been perceived as an elitist sport, with a bias towards the classes rather than the masses,” (she??) wrote in a letter to the newspaper.

“Maybe this notion should be erased by broadening its appeal and seriously wooing the crowds.

“Instead of barricading the entire event, maybe the public could be allowed fleeting glimpses of the race from certain vantage points.”

WHERE’S THE ACTION?

Formula One’s fast cars, glamour and big money have proved a winning formula under Mr Ecclestone’s charge, but the sport has also lost some of its appeal in recent times. According to media reports, the overall television audience has fallen by a third from 600 million in 2008.

The dip in popularity has been attributed to a number of factors: Formula One’s switch from free-to-air to pay-TV in the pursuit of higher broadcast rights fees, the dominance of single teams in recent seasons (Red Bull from 2010 to 2013, Mercedes since 2014), calendar changes that saw traditional races in France and Germany being scrapped, and the high cost of ticket prices.

Infiniti’s Mr Volpe also cited the lack of a digital marketing strategy for declining audiences and fans worldwide.

He said: “The key reasons for the decline of TV viewership are, in my opinion, the natural move of the young generation to different platforms (social media and digital), the lack of diversity of the content, and pay-TV, especially in countries where the sport is not even the most popular.”

The complexity of the sport’s many technical rules and changes, as well as the huge disparities in budgets between some teams, has also been a factor, and has drawn the ire of teams, drivers and fans alike in recent years.

Force India driver Sergio Perez would like to see closer competition between the teams.

“I would love to see Formula One a lot closer...giving the midfield teams the opportunity to be capable of winning a race, fighting for titles,” he said last week. “For that, you need to change the system, how you divide the money, because there’s obviously a massive difference.”

While teams and drivers are hopeful that Liberty Media’s roots in the United States could see Formula One expanding its reach in North America, Deloitte’s Mr Walton suggested that another off-track development could give the sport an added shot in the arm.

“The latest twist has seen rumours of Apple being in talks to buy McLaren – both the supercar manufacturing arm and the Formula One team,” he said.

“Even a development that is not related to racing like this could help bring more fans into the sport as Apple’s loyal supporters could begin to follow the sport, and Apple can use their branding strength and direct-to-consumer technology engagement to build interest.”

SINGAPORE AND F1: MADE FOR EACH OTHER?

While those interviewed said there was room for improvements to be made to keep the Singapore Grand Prix in fine fettle and keep drawing the fans, big money businesses and everyone in between, there is little doubt among them that Singapore remains the crown jewel of Formula One.

Both the Republic and Formula One have been mutual beneficiaries of the partnership over the past nine years. And this relationship will certainly be a very strong consideration as the Singapore Grand Prix ponders its future beyond 2017, they said. This sets the table for the way forward, they added.

Mr Volpe summed it up best when he told TODAY: “We have extremely successful places like Singapore and Abu Dhabi that generated a lot of value for the countries, and also for the sport. We can all agree that Formula One gained a lot from Singapore, the first night-time event. It’s exciting, (it’s in the) city centre, and also, Singapore gets a lot out of it.”

Added Mr Walton: “It’s a mutually beneficial relationship. So if both parties bring that attitude, a deal can easily be struck.”

 

Related topics

the big read

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.