Friday, November 14, 2008

Is it time to rethink F1's eastern shift?

As many of you know (and repeatedly gripe about), F1 has been adding more and more races in Asia. First came Malaysia in 1999, followed China and Bahrain in 2004, and this year Singapore. In the next few years we are expecting to see India and South Korea join the party, paying exorbitant fees that no European or North American promoter can afford to pay, all this for the privelege of dealing with Bernie Ecclestone's repeated demands for night races and later starting times for European television while taking away races held in that very market. Normally it would sound like daft business sense to keep doing this, but the Ecclemeister is pocketing the 50 million bucks per year and is generally happy. Unfortunately these promoters, usually governments, are nowhere near able to make any semblance of a profit, but they have thus far shut up and paid, leaving the bitching and moaning to the Europeans.

However things appear to be changing as the Chinese Authorities are starting to balk at having to pay Bernie so much money for a race that the locals don't care about. The empty grandstands this year are a testament to this indifference on the part of the Chinese people, even after the organizers gave away tons of free tickets and bussed them in for free just to save a little bit of face. Now they are grumbling about having to pay so much and are considering the possibility of letting their contract lapse at the end of 2010. The empty grandstands are a similar sight in Malaysia and Bahrain, and the novelty of the race in Singapore is sure to wear off in a couple of years. The Chinese GP has been a financial disaster for the city of Shanghai and I don't suspect that the city of Kuala Lumpur is reaping any great financial rewards for their race, unlike the Canadian GP which is huge for the city, these Grands Prix go largely ignored by the local populous.

If F1 is going to remain relevant in the places where the most ardent supporters live it will have to start bringing the races back to these fans, not taking them away and giving them to people who for the most part don't give two shits about it. Hopefully this will serve as a wake-up call to the FOM people that their asian expirement is not working and should be stopped before more cities waste hundreds of millions of dollars on race tracks that will not have any chance of making a profit.


Pete DaSilva said...

Specifically about China I think the race organizers are in a unique position in that they are able to talk to the FOM in "win-win" terms as opposed to Bernie blackmailing organizers for more money. The Chinese GP has served it purpose in that it has helped to raise the profile of China. The Chinese government can further subsidize the race if they wish but unlike Canada or Belgium in the past they do not need to.

The real question is since F1 is in slash and burn mode, will the FOM ask for less money in relation to future expenses that he asks race organizers to cover.

Senor Soup said...

another question is if they renegotiate for lower terms with Bernie, will it serve as a precedent for other races? Or for potential races in the future? Will they look at this and say, hold on, why should we pay for the privelege of losing money when China has renegotiated not to? I think this development may have farther reaching consequences than just one race.

Pete DaSilva said...

It is an interesting question. Given that question, it would not surprise me to not see a Chinese GP in the future. However, given the economic conditions of the world and the sport itself, race organizers do not need the lead of the Chinese to say to Bernie, "hey your expenses are lower, hence your share should be lower."