F1: the Singapore Grand Prix question
Recent arrests involving key figures put the night race under the spotlight
The Singapore Grand Prix is the first night race in the history of Formula 1
I’ve been covering, writing and commenting about Formula 1 since 2002, before Singapore started hosting the night race six years later. My work took me to Grand Prix races in Asia, Europe and the Middle East.
Along the way, I’ve broken global exclusive stories, including the arrival of F1 in Singapore, and written a book on the history of motor racing in the Lion City. I decided to take a step back when the pandemic hit us.
The Singapore-F1 marriage has been moving along well and apart from the same old, same old issues, what was there to tell or comment about the Singapore Grand Prix that has not already been written?
There seems to be nothing new to write about that will excite me or readers. So, after Covid 19 hit the world, I figured it was a good time as any to dial down and relax.
For the second year in a row now, instead of covering the Singapore Grand Prix from the paddock, I watched the race on TV from the comfort of my home. And I’ve thoroughly enjoyed it.
The itch, though, as any journalists will readily concede, never goes away to write or comment. Especially when events happen.
The CPIB probe and arrests
I am referring specifically to Singapore’s anti-corruption agency, CPIB, arresting Ong Beng Seng, chairman of Singapore GP that owns the F1 rights to the night race here, and Transport Minister S Iswaran in July.
They were released on bail, but the nature of the CPIB probe has not been made public. As both men have been integral to F1’s arrival in Singapore in 2008 and in subsequent contract extension talks with Formula One Management (FOM), it triggered speculation that investigations are linked to the deals.
In the negotiations with FOM, Iswaran had been the face of the government through the Ministry of Trade and Industry (MTI). As co-partners with Singapore GP, MTI’s arm, the Singapore Tourism Board (STB), foots 60% of the S$150 million cost to stage each Grand Prix, with Ong’s company paying the remaining 40%.
Their arrests led Second Minister for Trade and Industry Tan See Leng, who has taken over Iswaran’s place, to declare in early September that “The show goes on”. Referring to this year’s race, he emphasised that everything was moving at full speed and there was “no holding back of any other events”.
It still begs the question: Has the sanctity of the Singapore-F1 marriage been breached? It prompts further asking if Singapore still needs Formula 1 and vice versa.
Let’s explore this.
Studies, especially by the Boston Consulting Group in 2012, tells us the F1 race here has produced economic benefits for Singapore (Read Dr Faizal bin Yahya of Lee Kuan Yew School of public policy). In an October 2022 report, MTI reiterated this point that “Since its debut in 2008, the Formula 1 Singapore Grand Prix has generated more than S$1.5 billion in incremental tourism receipts.”
It further adds that “90% of the race organisation is sub-contracted to Singapore-based companies, including F&B companies, events companies as well as logistics and transport providers”.
On the flip side F1’s value has been on the up and not because of Singapore but due to the entire package of race venues, drivers and teams who have been delivering an attractive product for consumers and sponsors.
When US conglomerate Liberty Media took over F1 from Bernie Ecclestone’s clutches in 2017 for a reported US$4.4 billion, the sport’s stock rose and rose to its current US$17 billion valuation.
In a July 2023 report, Forbes estimated that on average, Formula 1’s ten teams are each worth about US$1.88 billion. Ferrari leads the pack, tipping the scales at US$3.9 billion, with Mercedes following closely at US$3.8 billion. The paupers of the lot, Haas and Williams F1, are worth at least three quarters of a billion each.
With so much money floating around, even the devil would be tempted to dip his fingers into the F1 tiller.
The night race allows Formula 1 to break from convention to do things differently
The Asian Conundrum
Despite its relatively young age compared to the more established classic circuits in Europe, fans, drivers and teams have continuously rated the Singapore Grand Prix highly and went as far as to describe it as a modern classic.
Ecclestone has – and now Liberty Media must – acknowledged that the organisation of the night race, especially the service and logistics management, deserves a five-star rating. The fan experience of the Singapore Grand Prix is such that F1-centric travel agencies recommend it as a must-go event.
East of Suez Asia has been an important market for F1. It first came to this part of the world in 1976 in Japan, which was the leading economy in the region then, and was there for two years. It became an annual affair from 1987 onwards. When Bernie Ecclestone was firmly in-charge of F1 in the mid-1990s, he also added Malaysia, China, Singapore, South Korea and India, in that order, to the championship.
The last two countries’ tenure was short-lived, lasting three and two years, respectively, until 2013. Malaysia decided to drop out after 2017 as it no longer made financial sense for them. Post pandemic, only Japan and Singapore are still in the F1 calendar, with China yet to decide if it will return.
Despite the rise in its stock, Liberty Media has not made any headway to address this shortfall. They have instead added two more races in the United States – in Miami and Las Vegas – and another two in the Middle East with Saudi Arabia and Qatar joining the F1 ranks.
The share of F1 races, in terms of regions, as it stands now, is:
Europe – 8
Americas – 6 (including 3 in the US)
Middle East region – 5
Asia – 2
Oceania – 1
This is an anomaly because Asia is home to about 4.7 billion people, which is about 60% of the global total. Two of the world’s top consumer markets, China and India, are here, with Indonesia set to join the top four ranks, which includes the US, by 2030.
Asia’s share of F1 races should be concerning to sponsors who fuel the viable existence and well-being of the sport. Liberty Media’s attempt in 2018 to revive the Vietnamese Grand Prix idea and add it to the 2020 calendar after Ecclestone abandoned plans to pursue it, was at best ill-considered. It revealed their lack of understanding of the Asian landscape, in terms of its economics and culture.
As it turned out, after all the fanfare and completion of the semi-permanent track in Hanoi, the planned race was cancelled in 2020 on the back of the pandemic. All talk of a Vietnam race has since petered out.
The value proposition factor
Putting aside commercial politics, we come to whether there is a future for F1 in Singapore. Perhaps a more pertinent question would be: do they really need each other? We must be honest that before 2008, both were doing quite well on their own. Tourists and investors knew who and where Singapore was and the numbers pouring in, dollar wise, were at healthy levels.
The state of F1, too, was excellent.
This leads us to the next relevant question: What value propositions did Singapore and F1 wanted to deliver to their target audiences that led to the race here from 2008?
I would venture that it was, and has been about, showcasing what each can do and how snazzy they could go about doing it. The first was staging the first night race in the history of F1 that surmounted initial safety fears from teams and drivers.
For Singapore, the message to investors and tourists alike was that in doing business we can be creative and, yes, have fun, in this Little Red Dot. It is not always about sticking to convention and eschewing new ways of doing things.
The Singapore kiasu psyche of never wanting to fail contributed to delivering a “wow” event that has been charming audiences around the globe. The world was watching then and continues to watch to this day.
Is it a coincidence that F1’s debut in Singapore came at a time when the startup ecosystem here was growing after the government invested “$60 billion in 1990 to support R&D in universities, research institutes and for industry” (World Bank report)?
Nine years later, authorities also launched a US$1 billion fund to attract venture capital fund managers who play important roles in the start-up ecosystem. As of 2019 there were 3,600 start-ups – with $10.9 billion invested in them – that employ close to 170,000 people (estimate).
How many of these startups benefitted from investors who had witnessed what Singapore could do, just by looking at how the organisation of the F1 race here was executed. It is hard to tell because there is no data to disclose this.
For F1 the key message was for race promoters in the calendar, and for teams, to not be afraid to go beyond time-tested ways of doing things. For example, they wanted to prove that time zones will not stifle their quest to expand to more destinations around the globe.
This glass ceiling was shattered because the European audience, its traditional primary market and the source of major sponsorship, was able to watch the Singapore Grand Prix on TV at a time they were accustomed to – in the early afternoon.
Since then, Bahrain, Abu Dhabi and Saudi Arabia have been holding the races under lights, but their decision to do so is to allow their residents to attend the races on Sunday, which is a workday for them.
Las Vegas will debut with a night race and I suspect it is because they saw how the Singapore skyline glittered during the Grand Prix.
The snazzy Singapore Grand Prix has charmed fans, teams and sponsors
The Singapore question
Whether or not the CPIB probe is tied to Ong and Iswaran’s F1 contract negotiations is beside the point. But we need to answer whether MTI Minister Tan’s encouragement that the show must go on has any merit. Or without these two men, Singapore can continue to deliver a unique F1 product.
The continuous successful staging of the Singapore Grand Prix, though, has not been a one or two-man show. A good team of capable and innovative people at Singapore GP and STB have been behind the managing and organising of the event. I have had the privilege of knowing and working with them since 2008, and am confident that should Ong and Iswaran step down from their roles, the night race here will and can only grow from strength to strength. Even set new benchmarks.
There are plenty of opportunities for the Singapore-F1 marriage to blossom further beyond the night race novelty. Emerging technologies, especially artificial intelligence, that can have everyday applications for communities everywhere are frontiers both can exploit.
They have started doing this to reduce the Grand Prix carbon footprint here, by employing LED lighting around the 4.94km street circuit for this year’s event. Race organisers have also installed 1,396 solar panels on the roof of the F1 Pit Building.
Moving forward, they are also looking into using B100 biodiesel and hydro-treated vegetable oil for their on-site generators to replace conventional fossil fuels such as diesel by 2028.
Like any marriage, the Singapore-F1 union will face trials but they can keep it alive with interesting and innovative ideas. To ditch the Grand Prix after working so hard for 15 years to make it stand out in the calendar is a step backwards and even manifests a weakness and reluctance to confront obstacles.
This isn’t what the Singapore can-do spirit is all about, something that has propel us to forge ahead in the face of impossible odds to our existence and allowed us to punch above our weight.
This is what has helped us to turn the derogatory Little Red Dot moniker around into something that every Singaporean is proud to wear as a badge of honour.
The way forward for the Singapore Grand Prix is for the government, organisers and F1 to show they have what it takes to overcome challenges and have the ability to iron out the kinks that emerge from time to time.
There is no need to talk about divorce proceedings. The show must go on.