20/09/2012
NEWS STORY
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Mat Coch writes:
The Singapore Grand Prix contributes more than $50 million (£30.8m) a year to the Singapore economy thanks to tourists visiting the country for the iconic night race.
Now in the final year of its initial contract, the Singapore event has quickly established itself as one of the premier races on the calendar. However, despite its standing it's believed promoters will stump up almost $60 million (£37m) in sanctioning fees to Formula One Management, making it one of the most expensive races on the calendar. In 2010 the event made a $57.5 million (£35.5m) loss according to Formula Money.
Speaking ahead of this weekend's Grand Prix, Singapore's second trade minister S. Iswaran told Bloomberg that the event contributes an average of $113.5 million (£70m) in revenue from the 40,000 tourists who attend the Grand Prix. When one takes the loss made by the government it suggests Singapore receives a direct $56 million (£34.5m) benefit as a result of hosting the Grand Prix.
Though down three percent on previous years bookings, according to data compiled by Amadeus IT Holding SA and Forward Data SL, it's believed most visitors arrive in Singapore on Thursday from Australia, the UK and USA, before staying for the duration of the Grand Prix weekend.
Although there is no contract in place for 2013 it's widely believed Singapore will remain on the calendar with negotiations well underway for a new deal. "We will take a hard look at the benefits that accrue to the economy as a whole and in turn what are the costs that the government would have to incur in order to continue to support this event in Singapore's context," Iswaran explained.
Even without a new deal it's believed Singapore will be on the calendar in 2013 as it is understood promoters must give FOM formal notification of their intention not to host an event. Without doing so it's suggested the race could simply move to a rolling contract.
Given the race has become such a prominent fixture on the calendar FOM boss Bernie Ecclestone will naturally be keen to get a new deal in place, protecting the sport's income for the medium to long term.
Just how keen Singapore is to sign a new contract is unclear. The current deal seems to favour FOM financially while the fact it has elapsed and is now rolling on year-by-year seems to favour Singapore, which can simply cancel the race if the markets turn and the race stops generating sufficient income.
With tourism growth slowing Ecclestone may be forced to take a cut to his sanctioning fees in order to secure the race long term.