With Malaysia's recent decision not to renew its hosting rights with Formula One (F1) after 2018, the stakes in the region are high for the Formula One Group, with negotiations in Singapore still ongoing in reaching a final decision – that is, whether or not the city state will host the annual Singapore Grand Prix after 2017.The big question; if Singapore follows Malaysia's lead and declines new hosting rights, what will happen to the brand’s foothold in Southeast Asia altogether?"Clearly, the F1 looks bad if it is no longer in Southeast Asia (SEA)," said Nick Foley, president of Southeast Asia Pacific and Japan for Landor. While other sporting events do take place in Singapore, such as the WTA women's tennis Finals and the Rugby 7s series, only F1 proves that Singapore should be taken seriously as a sporting hub on the world stage, Foley said.He added:With Malaysia now pulling out of Formula 1, Singapore is well placed to negotiate a deal that works well for the country, as well as for F1."It will be counter-intuitive for F1 to lose its presence in SEA, one of the only economic regions in the world that is enjoying reasonably robust economic growth, thanks to a growing middle class, rising incomes and steady inflow of foreign direct investment," said Dragon Rouge’s CEO of Southeast Asia, Zayn Khan.But again, Khan added, this also leads to the question: "Who actually attends F1 in Malaysia and Singapore and why are they losing interest?"He also emphasised that questions about the competition's relevance and identity in the region need to be addressed, and quickly. One possible reasons, could be that the glamour of sports racing has worn off and needs to be re-invented, Khan said:It needs an injection of technology. It needs an injection of gender equality. It was sexy in the 70s.Khan added that Millennials probably don't care about the races anymore. Even more worrying is that the people who are driving the growth of this region - the local emerging middle classes - are not being engaged by F1."They probably see it as an event for the elite, for foreign tourists, as a television property for big corporate," he addedCEO of Consulus Lawrence Chong echoed Khan's observation pointing out that “F1 is at a crossroads and it is not like before. Auto brands are not putting that much emphasis into the race itself and are reconsidering their participation in the race. So certainly the issues at F1 do have an effect on the host countries."Reports say that Singapore’s F1 race costs about SG$150 million to put on every year, 60% of which is funded by the government. But it doesn’t help the country to justify when ticket sales are not improving.Both Chong and Khan raised concerns about F1 losing a key foothold in SEA with one of the world's largest concentrations of youth, if a deal with Singapore can't be struck.What Singapore stands to lose?When asked what Singapore stood to lose if F1 does not return in 2018, Foley said branding and destination marketing could be heavily affected without the annual night race. He added that Singapore needs a global event to attract tourists and put it on the map."The night F1 on a city circuit is unique and distinct. The F1 is tremendously positive for Brand Singapore. It would be a shame to see it go,” he said. Foley added that Singapore does an amazing job of hosting the F1 and the city looks stunning."This is what the rest of the world sees. It’s good for SEA and brilliant for Singapore. Could you imagine what a two hour TV advertisement would cost? This is the power of holding an event which looks amazing and goes to a broad, global audience," said Foley.Foley also added, in determining whether or not to keep the F1, Singapore must distinguish between short- term tactical reasons versus broader strategic factors that bode well for the nation reputation. It must also consider the qualitative criteria rather than a quantitative one that only focuses on immediate financial return.“The F1 attracts a range of bands and musical entertainers. How could more be made of this? The challenge is to move the F1 from just being a car race to being an entertainment brand with broader appeal. This is eminently possible. If the shift can be made, then Brand Singapore will be the winner!" said Foley.But of course, the challenges also remain on how F1 supremo Bernie Ecclestone would persuade the city state to continue in hosting the grand event.However, Chong said F1 has done enough to help position Singapore as an exciting city and a place of the future. “Over the recent years, Singapore has consolidated this image as a city for tomorrow. So although F1 has helped to visualise that, it is not worthwhile to invest so much money for a competition that is losing audience and participants.”Singapore has to make prudent bets, said Chong: “F1 leadership structure has not evolved and the future is not certain so it is better to end on a good run than end it when the going gets bad.”Meanwhile, earlier this year, news broke of the new owner of F1 being US media conglomerate Liberty Media which acquired the company for US$4.4 billion from Luxembourg’s investment fund CVC Capital Partners. This deal also values the sport at US$8 billion, according to The Guardian. The takeover certainly brings a fresh chapter for the sports group, which has about 400 million viewers worldwide, but it also opens up new questions on its new direction.Let's see what the future holds.
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