Monies spent on F1 will be used to develop motosports
THIS year’s Malaysia Grand Prix Formula One (F1) race at the Sepang International Circuit in October will be the last. Malaysia will no longer host the races beginning next year. The cabinet has agreed to end the yearly sporting affair. Prime Minister Datuk Seri Najib Razak said this was in view of dwindling returns for the country compared with the cost of organising the event. In a social media post, he said the decision was made after taking into account reports and views from the organiser, Formula One Management, and SIC on the financial impact to relevant parties.
Given that it has been some 20 years since the F1 races began in 1999, it is only right to evaluate F1’s financial performance and economic returns. Granted, the races promoted Malaysia as a world-class sporting destination, as well as a global tourist destination, but times have changed and so much has evolved, especially in the sporting arena. This is not about abandoning what is a world-class racing circuit; it is about moving on to another phase. And, as pointed out by the prime minister that it is not for want of money, rather it is deciding to spend what is a large financial outlay for hosting the F1 on better returns for the country. Furthermore, given the increasing competition, it is proving less worthy as a business venture. Indeed, the country cannot go on sponsoring an event that will not yield attractive returns. When Malaysia first started in 1999, there were only 16 countries hosting the prestigious race, including two Asian countries. But today, there are 21 nations, with six Asian countries. This has naturally led to a reduction in returns to the organiser and the country.
By no longer organising the event, the money could be put to better use. For one, the facilities will continue to be used for regional and local events. The Sepang circuit will continue to play a key role in Malaysia’s effort to promote the nation on the international stage; it can host major motorsports events, such as the MotoGP and other races, which will continue to draw visitors to the country. Malaysia could also embark on building a team of world-class F1 drivers to compete internationally and bring sporting glory to the country.
There will be those who argue that opting out of hosting the prestigious F1 is an admission of failure, but when prestige becomes a burden, it would be folly to continue. Petronas will continue to sponsor its Mercedes-AMG Petronas F1 team as a marketing strategy. This can surely assist Malaysia’s aim to grow its F1 drivers and to facilitate a transfer of skills and knowledge in the area of motorsports. After almost two decades of hosting the F1 Grand Prix, Malaysia is ready to develop its motorsports know-how and talent; a sensible move. The benefits will now be accrued directly by Malaysians through the development of motorsports and not just its tourist industry. Sungai Petani, for example, will benefit from a special circuit. Given that F1 races have not done much for the books of other countries, this is a rational and sensible move by a responsible government in challenging times.