Singapore Grand Prix may stay beyond 2018 – but not on ‘frustrated’ Bernie Ecclestone’s terms, says expert
Deloitte’s James Walton says the F1 supremo may be annoyed at Singapore’s demands to pay less for the grand prix, the 86-year-old having earlier accused the city state of being ‘ungrateful’
Bernie Ecclestone’s frustration at the pace of negotiations with Singapore Grand Prix organisers may have prompted his outburst to a German magazine, which reported the Formula One chief as accusing the city state of being ungrateful and on the verge of leaving the circuit.
James Walton, partner and Southeast Asia sports business group leader for Deloitte in Singapore, said he believed Singapore wants to stay in the Formula One schedule after its contract expires in 2018 but on its own terms – a stance that Ecclestone is struggling to deal with.
The 86-year-old Briton made a U-turn one day later, saying he was misquoted and that he wanted a “long-term” deal with Singapore – which Walton said was unusual for the normally outspoken tycoon.
“Bernie Ecclestone has a history of making off-the-cuff comments and speaks his mind, so his first comments were not out of character,” said Walton. “I was asked at the time if this was a negotiation tactic but this is not a negotiation tactic that any business school will teach. A proper tactic would be that if Singapore doesn’t want it someone else will.
“When I first read his comments about Singapore being ungrateful I felt this is someone frustrated with the way negotiations are going and given the current economic climate, perhaps Singapore is negotiating more firmly and looking downwards in terms of price and he may not particularly agree with that.”
The only public comment Singapore has made with regard to its F1 deal is that it costs the country US$150 million over its five-year commitment, which amounts to around US$30 million for each year. Tens of millions would be added to this amount because of other organisational costs related to staging a major grand prix race under floodlights.
With the Malaysian Grand Prix leaving F1 after 2018, a Singapore exit would leave Southeast Asia without a Formula One race for the first time in 20 years. There is also speculation that the Chinese Grand Prix in Shanghai is reconsidering its position in the F1 calendar.
In addition, Walton says F1’s new American owners, the Liberty Media Group, may not be happy with Ecclestone’s outburst and subsequent clarification.
“Singapore is in a strong bargaining position,” said Walton. “It’s harder and harder to get the F1 hosting fees that the sport would like. TV numbers and spectators are dropping but Singapore is still in the top four or five in attendance and TV figures are staying constant.
“It’s very popular with the drivers and there is particularly high network value with sponsors. Major sponsors very much value races like Monaco and Singapore, which may have more weight than somewhere like Malaysia.
“And with new owners coming in, to lose a race like Singapore, it would not be the most auspicious start. With Malaysia dropping out, there is potentially no race in Asean, which is one of the world’s
rising markets, has a growing middle class and will be the fourth-largest economy in 2020. If there is a market F1 wants to crack, it’s this one.”
Walton said Ecclestone, who has ruled F1 for decades and made billions from the sport, may not be enjoying the same influence he once had under the Liberty group, hence his decision to clarify his initial comments.
“In the past, Bernie would not take back comments and clarify,” said Walton. “I have a nagging suspicion about his role in the sport, even though he is nominally in charge.
“I do wonder how Liberty Media would feel about his comments because they are also involved in the negotiations with Singapore, not just him.
“Basically, it boils down to the fact that F1 wants Singapore on their terms, Singapore wants the GP but are not willing to pay more. They could possibly meet somewhere in the middle. I still believe F1 wants Singapore.”