Business

Saturday February 14, 2009

Revving up in Asia


IF there is one person who deserves credit for taking Formula One (F1) to where it is today, it has to be Bernie Ecclestone.

At 78, the Formula One Management and Formula One Administration president and CEO, who took the helm in the late 70s, has turned the sport into a multi-billion dollar event that is watched by millions around the world.

And just how much money does F1 generate? Citing industry analyst Formula Money, Deloitte Sports Business Group (a Britain-based sports business specialist) last year reported that F1’s global revenues stood at US$3.9bil, making it the world’s highest revenue-generating annual sporting event.

Bernie Ecclestone

The amount comprised of commercial rights revenues (race sponsorship, corporate hospitality and broadcast fees), team revenues (including sponsorship and contributions from partners and owners) and circuit revenues (from ticket sales and sponsorships).

Given F1’s status as a money churner, many Asian countries are eager to be associated with it. F1 ventured into Asia in 1976 – 26 years after the F1 World Championship was founded. Japan hosted the first Asian F1 race that year and slowly but surely, the business of F1 has been spreading throughout the continent.

Malaysia came on board in 1999, followed by China and Bahrain (2004). Last year saw Singapore host the first F1 night race, while Dubai will make its debut this season. Korea and India are also said to be possible hosts next year.

Caroline Reid of Formula Money was reported as saying that with emerging markets eager to put themselves on the global map of F1’s millions of fans, the sport was “likely to grow further east in future.”

Ecclestone does not deny the importance of Asia and its significance to the business of F1. “Asia is very important. I have been working for the last 20 years to get F1 into as many countries as possible. There should be no limit to where we can take and position F1,” he tells StarBizWeek in a telephone interview.

The Sepang track is a super circuit and it just needs the proper maintenance to make sure it stays that way, Ecclestone says.

Asked whether Asia was more resilient amid the current global economic slowdown compared with other continents, he says: “I don’t think Asia is more resilient. But it’s still early days and just too early to tell.”

The global financial crunch has had an impact on the F1 business, with Japan-based teams Super Aguri and Honda pulling out of F1 roster. The remaining teams have committed to serious cost-cutting measures to avoid a similar fate. Still, Ecclestone is optimistic.

“The global financial crisis has affected the whole world and F1 won’t be any different. But I’m happy that we are still retaining our sponsors and hope that the public will continue to watch our races,” he says.

Ecclestone notes that spectators in Asia usually ‘wake up’ to the sport only when it is hosted in their country.

“For us, one of the biggest challenges (in promoting F1 in Asia) is letting people understand that F1 is not just about one race that is held in their country. They need to watch the whole season to fully appreciate the sport,” he says.

On the local front, Malaysia’s involvement in F1 has both been praised and criticised in the past by the F1 supremo. The Sepang International Circuit, for example, has taken a few “blows” for its lack of maintenance.

“The Sepang track is a super circuit and it just needs the proper maintenance to make sure it stays that way,” Ecclestone says.

Overall, he says he has nothing but praises for Malaysia. “The people are nice and kind. They are not the type to make trouble and we are very happy with their continuous support.”

Asked about his favourite Malaysian cuisine, Ecclestone laughs. “Well, I like oriental food,” he says.

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