Four-year deal for Singapore to host F1 until 2021
New four-year deal will save Republic $15 million annually
The Formula 1 Grand Prix along Marina Bay has been hailed as the crown jewel of the sport, with many in the industry lauding the mix of high-octane speed along the streets of downtown Singapore and top-class entertainment held on the sidelines.
With the 10th edition of the night race set to unfold this weekend, Minister for Trade and Industry (Industry) S. Iswaran yesterday announced that the Republic will continue hosting the event for another four years, until 2021.
"If you have a strong product, which is what we believe we have, and one that is well differentiated and has significant appeal for fans... then I think it can stand up to any kind of broader competition," he said.
"In our conversations with the parties involved in the event... Singapore continues to command a certain differential position, and that has been one of the key considerations that has informed our own decision about extending the term of the contract."
The race here is rated higher than the Chinese Grand Prix in Shanghai, and the extension suggests that F1's new American owner, Liberty Media, is poised to make Singapore the centrepiece of its Asian swing.
And at a reduced cost to the Republic, too.
Franchise fees for the event here was believed to be between $40 million to $50 million.
The overall annual cost to hold it was $150 million, with the Government footing 60 per cent of the bill and organisers Singapore GP bearing the rest.
That split will not change, but the country will save $15 million annually, with sources in the paddock yesterday citing a cut as high as 50 per cent in the franchise fee for the new deal.
DECADE OF EXPERIENCE
"From our overall cost perspective, we do expect it to be at about $135 million, which is a reduction of where it was before. The reasons for that are multi- faceted," said Mr Iswaran.
He pointed to the decade of experience organisers and promoters have had with the race and the organisational efficiencies that have arisen, along with new ways of generating revenue.
He revealed that the race has drawn 450,000 visitors here over the years, with $1.4 billion in incremental tourism receipts.
He explained that while Singapore had signed two previous deals for five years each, this extension is for only four years to give organisers time to establish a working relationship with Liberty Media.
It is also because the Republic is keen to see where the sport will go after the expiry of a Concorde Agreement in 2020.
The Agreement is a contract signed among motor sports governing body FIA, F1 teams and the Formula One Group - the group of companies that promote the sport.
It dictates terms under which the competition takes place and how TV revenue and prize money is divided.
While ticket sales for the Singapore event fell to 73,000 last year - down from 100,000 in 2008 - organisers revealed that there has already been a healthy pickup for this year's race.
With the weekend still to be included, there has already been a year-to-date 19 per cent increase in ticket sales.
While there have been calls for new initiatives, Mr Chase Carey, chief executive of F1, did not commit to tangible changes despite the growing sense that F1's new owners will bring an American feel to the sport.
"We have big plans for F1, but it's early days. We think the next three to four years, we can take F1 to a place that is good for all our partners and really add a new level of excitement and new dimensions to the sport," he said.