SINGAPORE — The roar of Formula One’s speed machines will be heard in Singapore for the next four years after it was announced on Friday (Sept 15) that the Singapore Grand Prix, the only night race on its calendar, is here to stay until 2021.
While the inaugural edition in 2008 was met with much anticipation and excitement among Singaporeans, the circumstances are now different from a decade ago. Questions have been raised on whether there are still benefits to be reaped from continuing to host the race beyond its 10th edition.
Last year’s Singapore Grand Prix saw its worst-ever ticket sales, with overall take-up of tickets pegged at 15 per cent lower than the average attendance since 2008. Global F1 television viewership also declined from 600 million in 2008 to 400 million last year, while average international viewership for the Singapore race remains at about 80.7 million.
Despite some pessimism surrounding the future of the Singapore Grand Prix, industry observers and analysts whom TODAY spoke to said that F1’s new owners, Liberty Media - which is headed by American Chase Carey - could rejuvenate the sport and in turn, benefit Singapore if their plans succeed.
CAUSE FOR OPTIMISM
Mr James Walton, Sports Business Group Leader of Deloitte Singapore and South-east Asia, noted that Liberty’s - which paid some US$8 billion (S$10.7 billion) for Formula One - plans to expand their reach and fan base in Asia, as well as their focus on attracing younger fans, will be a boon to host cities.
“The lack of competition in the sport in recent years has often meant the race is more like a procession – especially in Singapore where overtaking is challenging and there always seems to be a safety car on the track for long periods,” he said.
“But there is also a positivity around F1 now under the new owners that suggests that things will continue to improve as they begin to bring in their new ideas to grow the fan base and expand the sport. If they are successful in that mission, then host cities like Singapore will also benefit as the sport thrives.
“As Liberty implements their plans to target the Asia markets – including the growing middle classes and high net-worth individuals around the continent – and simultaneously build their focus on the youth market to develop their future ‘petrolhead’ fan base, it could bring a whole new spectator group to enjoy the Grand Prix.”
Anthony Indaimo, a partner at international commercial law firm Withers KhattarWong, also believes that the contract extension with the sport’s new owners will benefit Singapore, one of six cities in Asia on the 20-race calendar.
“It cements Singapore as an international sports and entertainment hub in Asia as well as one of Asia’s premier destination cities with its world-leading hospitality infrastructure,” said the corporate lawyer, who is an advisor to several leading F1 teams.
“Singapore’s reputation as the asset management capital of Asia also provides meaningful B2B (business to business) opportunities for local, regional and international businesses who can enjoy the spectacle of the Singapore Grand Prix.
“We have already seen an increase in attendances at Grands Prix this year following the recent change in ownership. The recent purchase has created a palpable sense of eagerness, excitement and expectations by fans, sponsors, teams and drivers that the sport will improve and re-gain lost ground to reclaim its rightful place as one of the premier global sport franchises.”
Mr Indaimo also added that the popularity and success of the SGP can also be used by the new owners as a case study to see whether key aspects can be “transferred and applied” to other races on the F1 calendar.
THE WORKS STARTS NOW
At Friday’s announcement of the deal extension, Trade and Industry (Industry) Minister S. Iswaran revealed that organising costs have come down to S$135 million annually, from the S$150 million figure he cited in Parliament in 2012, although the government will continue to pay 60 per cent of the costs.
CIMB economist Song Seng Wun believes the reduction may have helped convince Singapore to put pen on paper, and he said the onus is on Formula One to show what it can offer.
“If we don’t have to cough up as much money as before, the government may be thinking, ‘let’s just give it a try for another four years and see how the new owners can revive F1’,” he said.
“I believe the extension is really about us being willing to see how the new franchise owners can do more to boost the viewership.
“If, over the next four years, we don’t see any improvements, I think 2021 may be the last time we host it.”
Veteran F1 commentator Steve Slater singled out the potential of virtual and interactive TV as an area that F1 can look at to enhance the race experience for viewers and fans.
“One way is to work with technology, things like making driver’s eye-view a possibility,” he told TODAY in a recent interview. “For years, cameras have been mounted on the cars, so the next thing is to work towards having multiple-camera screen views on television.
“Television viewers could be looking down the sides of the cars and see exactly what the drivers would see. Imagine watching a lap of the Singapore GP as Lewis Hamilton sees it — especially with the majestic buildings in Singapore — all of a sudden, you go into a completely new dimension. And that’s where the new generation of TV viewers will be coming from.”
While race promoters Singapore GP will be celebrating their four-year contract extension, there is still uncertainty over the title sponsorship of next year’s Grand Prix. Its current two-year deal with title sponsor Singapore Airlines - which took over from previous sponsor Singtel in 2014 - expires after this year.
Mr Walton noted that while title sponsors are not an absolute neccesity, they help defray costs and provide a ready-made customer base for organisers to target.
He added that both sponsors had helped to spread the Singapore Grand Prix’s brand through a variety of means, but added that there is no urgency for the organisers to announce a new sponsor should Singapore Airlines choose not to carry on.
“Companies that would benefit the most from this positioning are definitely B2C (business to consumer) companies with an international focus, so they can make the most of the media exposure the Grand Prix provides,” he said.
“In reality though, besides Singapore Airlines, there are not many other Singaporean B2C companies that have a significant presence overseas where the branding will help them.
“There have been rumours about at least one of the local banks being a candidate, and many have questioned whether the organisers can persuade a foreign company to sponsor the race – however, many of the international brands present in Singapore already have extensive global sporting sponsorship programmes on their books or may not fit with Formula One’s existing sponsors.
“There is plenty of time for the organisers to… get a title sponsor in place by May or June 2018 ahead of the next edition.”
Source : http://www.todayonline.com/sports/singapore-grand-prix-renewal-could-give-speedy-boost-night-race?cid=todayfbcommented