An F1 Race for Bangkok? A Bottomless Money Pit!

[Guest fountainhall]

In a bizarre decision, certain authorities in Bangkok have decided in principle to put up the funding for a new Formula I Grand Prix to be held in the streets of the capital. The F1 organisation has put a Bangkok race on its calendar for 2014. And, like last weekend’s Singapore race, it will be held at night (probably starting around 8:00pm) – this to ensure much larger viewership and advertising revenues to the TV companies which will transmit it in Europe where the sport has a huge following. But is such an event worth anything like the investment required? Far from it, in my view.

 

Just today, the Major Events Minister of the state of Victoria in Australia announced her disquiet over the continuing escalation of the cost of hosting the Formula 1 race (Melbourne has had the race on the calendar for more 16 years). In 1996, the cost was just A$2 million. For 2013, that cost will be A$56.7 million – approx. Bt. 1.830 billion.

 

Of course, many of the more recent nations jumping on to the FI bandwagon have had little or no motor sports history. What they want is the admittedly huge worldwide television advertising and exposure that results from an F1 weekend. It all started, I think, with the former PM of Malaysia, Dr. Mahatir Mohammed, and his love of grandiose projects. So huge sums were spent to build an F1 quality circuit just outside of KL. Shanghai, Singapore and Korea jumped in, as did three of the Middle Eastern countries and Istanbul. Suddenly, the F1 axis had shifted East to where the big new money could be found and away from much of Europe which is finding it increasingly difficult to afford these costly events without the tobacco sponsorship that is now banned.

 

Bangkok, we are told, will almost certainly have to pay the F1 organisation an annual rights fee (just for permission to hold the race!) similar to the Bt. 1.25 billion that Singapore has recently negotiated for its next 5-year contract. But that is just the beginning! First, a street circuit has to be identified and the roads rebuilt and resurfaced to be brought up to the required standards. Then, the proper infrastructure for an F1 race must be put in place. This includes paying the F1 organisation US$8 million to rent portable pit buildings, $8 million to buy safety fencing and barriers, and then $14 million on renting grandstands. On top of that, a night races requires a specially designed and hugely expensive lighting system to develop an even light level over the entire track. Italian company Valerio Maioli designed and constructed the Singapore system –

 

Race promoter Singapore GP said at a press conference today that the night competition will require the track to be nearly four times brighter than a typical stadium, or a light level of 3,000 lux.

 

Valerio Maioli's proposed lighting system for the track involves some 1,500 lighting projectors to be powered by 12 twin-power generators. The 24 generators are expected to be fitted in "special protected areas" and will power, in addition to the lights, the PA system as well as the track's monitoring equipment, said Valerio Maioli, the company's chief.

 

Should one generator fail, the load will instantly be picked up by the second generator, preventing a drop in lighting levels, said Maioli.

 

"Each power generator can power the whole race in the event of either failure," he said.

 

Note that this system is hired and so must be brought in each year. Set-up for the first race takes two months; for subsequent races about six weeks! Nowhere can I find the cost of designing, freighting, installing and renting such a system. But it certainly will be in the millions of dollars!

 

And the flow of cash to F1 doesn’t stop anywhere near there. It takes huge chunks of the sponsorships, international television rights fees, corporate hospitality and other income generated locally.

 

Then, think of the traffic disruption in a city already clogged with 4.4 times the number of vehicles it is presently designed to accommodate. F1 races require the street circuit to be closed on assorted days to get the infrastructure assembled and then dismantled. For several hours on the three days prior to the event, they are closed for race practice. They are then closed entirely on the day itself. In my view, this would create unbelievable chaos – unless it is held over Songkran!

 

The Bt. 1.25 billion quoted by the governor of the Sports Authority of Thailand (SAT) amounts to approx. US$41.67 million. The SAT says this would be paid 60% by the government and 40% by interested sponsors like Red Bull and Singha. So the government’s contribution would be a nice round US$25 million.

 

Aha! But here is the catch! That is just the rights fee to F1. What about the US$30 million of extra costs highlighted above? Even though the use of local contractors may bring them down, who pays for that? The ESPN site below suggests the Singapore government pumps in US$60 (Bt. 1.8 billion) to hold the race each year and that is on top of very substantial private sector investment. But Year 1 would unquestionably have been more expensive. And that will be roughly what Thailand will have to splash out for 2014.

 

But there’s more. The ancillary PR, advertising and marketing costs will be huge if the race is going to bring in all the extra high-paying tourists the government would expect to justify its massive investment and keep the total bill down to somewhere in the region of Bt. 1.8–Bt. 2 billion.

 

I happen to be a fan of F1 and watch a lot of the races (admittedly only on TV). I think it would be great to have an F1 race here. But a street circuit at night? Sure, if the track includes Sanam Luang and has wonderful aerial shots of the cars racing near the Grand Palace and the major temples, it would look stunning on TV. My fear, though, is that a lot of people for a wide variety of reasons will want to see this happen, and will thus not pay close attention to a full cost/benefit analysis – even if one is prepared and even if that provides an accurate reflection of true costs. It sounds to me like the sort of project that will just keep rolling downhill until it becomes impossible to stop.

 

Another Elite card bottomless pit scenario?

 

http://www.bangkokpo...s-nod-from-boss

http://www.news.com....p-1226481359613

http://en.espnf1.com...tory/56182.html

http://www.zdnet.com...tor-2062033396/

[Guest]

Bernie's always good at getting revenue.

 

Perhaps a city like Singapore might actually get a return from all the publicity & the raised profile of the city. I doubt Bangkok would benefit to the same extent.

[Rogie]

Good analysis.

 

Surely Thailand cannot afford this! 2014 is not far off, considering the money involved. Taking Z's comment a little further (apologies if I have overstepped his implications), Ecclestone must be rubbing his dirty paws in glee.

 

Formula One racing is a dorty dorty business - Britain's Labour government landed themselves in deep sh** by trying to bend the rules and currying favour with Ecclestone. Desperate governments do desperate things.

 

http://www.pitpass.c...e-truth-emerges

 

If I was a Thai government minister with any clout I'd run a mile from this. The BP article is headed

 

Thai GP gets nod from boss

 

so, that's all right then, da boss says and all the heads nod like nodding dogs do. Can't beat a nodding dog when it comes to the crunch. Crunching the numbers, that is.

 

I don't follow Formula One, but surely unless the number of European/North and South American venues diminishes in order to facilitate the Asian wannabes, there has to be some sort of sensible decision-making that says enough's enough, you can't organise a Formula One race without some sort of pedigree. For example, America, Europe and Japan have a history of producing and racing cars capable of competing in races such as Formula One. Where is Thailand's (and many other countries to be fair) pedigree?

 

Desperate governments do desperate things (like forget money doesn't grow on trees).

[Guest fountainhall]

you can't organise a Formula One race without some sort of pedigree

 

To be fair to the F1 organisation, they realised decades ago that F1 was overdependent on the European market and on tobacco sponsors. Ecclestone set out to create a huge worldwide brand by breaking into new markets where the money was rather than the long pedigree. Malaysia did have a car industry when F1 started up there. Similarly China and Korea. But Abu Dhabi, Qatar, Bahrain and Istanbul? Not a car factory in sight, as far as I am aware. Thailand, though, has a huge car manufacturing infrastructure - even if it is for other countries' vehicles.

 

I don't know the contractual intricacies of the deals between Ecclestone's companies and the other motor sports organisations that make up F1, but he struck such an extraordinarily sweet deal to market the races and do the TV deals that they have made him hundreds of millions of £s. Maybe he'll make a lot more from Bangkok. If so, it will be partly because someone bulldozes the project through officials who really won't understand the bottomless money pit they'll be opening up, and also because there does seem to be a lot of interest at grass roots level. When two of the top F1 drivers and their cars did a practice session near Sanam Luang a few years ago, more than 100,000 spectators turned out. Yet, the fact is that the vast majority of that crowd will be unable to pay for the very expensive tickets to see a full race 'live', should one eventually materialise!

 

Perhaps not surprisingly, given the massive amounts of money involved in F1, Eccelstone has spent some time in court fighting corruption charges. Britain's Daily Mail said yesterday he is expected to be indicted again very soon in Germany!

 

http://www.dailymail...o=feeds-newsxml

[Guest fountainhall]

As the media is reporting, Thailand has agreed a deal with the F1 organisers for a race to be held in November 2014.

 

Kanokphand Chulakasem, governor of the Sports Authority of Thailand, said the country would definitely get the green light to stage a Formula One race in November 2014

 

The event, to be called the Formula One Grand Prix Thailand, is likely to be a night race.

 

Although details, including the fee and venue, are still to be finalised, the SAT governor is confident that it will take place in Thailand.

 

"A contract is likely to be signed later this year," Kanokphand said. "It is likely to be a one-year deal with an option to extend."

 

http://www.bangkokpo...d-prix-revealed

 

The speed at which this announcement has been made makes one wonder who has factored into the equation all the costs of preparing a new F1 track on existing roads and the monstrous expense of the special lighting that has to be designed and installed.

 

One newspaper this morning said Singapore mandated a 30% increase in hotel rates as one of the ways of covering its US$40 million annual cost. But that of course is only the fee payable to the F1 organisation run by the octogenarian wheeler-dealer named Bernie Ecclestone.

 

And the fact that your name is on a calendar means zilch. Indeed, the Grand Prix of America in New Jersey has been on the calendar for two years now. Yet today it has been postponed yet again into 2014 from June 2013. As Ecclestone said –

 

"They've run out of time. They've had a wake-up call but it came too late."

 

Last month Ecclestone said the organisers had not complied with the terms and conditions of the contract.

 

On Friday Ecclestone said: "They got all the permissions together. Everything was done, that was all fine, but then they missed the boat a little on some financing that was coming in.

 

"Everything is set up, but it's now too late to finish on time."

 

http://www.bbc.co.uk...rmula1/20003521

 

I can never see this happening in Bangkok - unless private sources come up with a helluva lot more than their 40% presently being talked about.

[Guest xiandarkthorne]

Ah but aren't we forgetting the amount to be made in "fees" paid by potential "sponsors" for various things involved in other matters regarding the set-up? For example, the hotel (or hotels) housing the drivers and crew, drinks, souvenirs, concessions etc. let alone the local contractors who would be "bringing the streets of Bangkok up to the required standards". Even if the races never materialise, someone already stands to profit quite a tidy sum even before a single racing car is to be seen anywhere on the streets.

[Guest fountainhall]

I am sure you are correct. Also, it would not be uncommon in mega deals like this for an upfront 'goodwill' payment to be made prior to actual negotiations - perhaps on signature of a one-page memorandum of agreement. If a contract is signed, it is then deducted from the fee. If negotiations fail, that payment is never returned!

[Guest fountainhall]

Formula 1 Night Race in Bangkok in 2015

 

So went the headline the other day when it was announced that Formula 1 and its octogenarian supremo Bernie Ecclestone announced that a night race will be held in the Sanam Luang area near the Grand Palace. Not in 2014 as the Bangkok motorsports people wanted; it will be in 2015. So, as highlighted in an earlier post, the government will be in hock to the tune of around US$25 million for 60% of the rights fees and $30 million plus for the infrastructure and allied costs. Oh, I almost forgot! Then add in the corruption (oops, consultancy fees) that will be added on top - fees which the Anti-Corruption body now estimate as at least 30% of all large government contracts). So, being realistic, around $71.5 million at 2012 prices - all for around 160 minutes of worldwide television.

 

But all may not yet go Bangkok's way.

 

there have been questions raised about how the Thai race will slot in to a calendar that already has 20 grands prix scheduled for 2013, with new events in Russia and the US set to join in 2014.


 

The current number of races is restricted to 20 by the Concorde Agreement, the commercial contract that underpins the teams’ participation in the championship.

http://www.sportsdir...hp#.UNQ38Y4ihII

 

So what gives? 20 Grands Prix maximum in any year, and 22 already lined up? Clearly some races will have to get thrown off the calendar. Or F1 is merely up to its tricks again, playing along with Bangkok and the motorsports bodies here, racking up a whole lot of consultancy fees for a race which - oops - may never happen.

 

Fanciful? Certainly not. During 1998, a race for Zhuhai in southern China was inked on the F1 calendar for 1999. It never happened!

[Guest abang]

Singapore has the expensive opportunity to hold the first night race.

Five years on, we just inked another 5 years.

 

Seriously, the amount of investment is beyond the numbers in my cheap super market-bought calculator.

Personally the excitement of the actual car race died down by the second year.

 

What is more interesting - the concerts.

International artiste (with current popularity and not has-been) were lured to the city-state.

 

Actual returns - not much.

Inconvenience to locals - at least 4 working days before and after the race

 

Singapore vs Thailand..

Well, I can only say that the Singapore skyline looks wonderful, almost postcard-perfect.

Thailand - where are they organising the race?

[Guest timmberty]

most posts here seems to have missed the most important thinng about little cars whizzing around in circles ... that is how long it takes to set up the circuit ... this takes weeks ... not done the day before .. can you imagine how much worse the roads of bangkok will be if they had roads shut down for weeks on end ??

it takes 8 weeks to set up in monaco .. thats a place that is already ready for it .. so id guess being as this is thailand you could add another month to that ... then take it all away afterwards .. its not a city id want to live in for those 3 months im sure.

[Guest fountainhall]

The race is scheduled for the Sanam Luang area - near the Grand Palace and the two main Temples. There is no question that it will look absolutely stunning on TV. As for the concerts, Singapore has a great party week-end. But then these concerts have to be budgeted and someone has to pay for them! The Singapore government is always perfectly happy to lash out the cash if it helps SIngapore Inc.! Will Bangkok?

 

most posts here seems to have missed the most important thinng about little cars whizzing around in circles ... that is how long it takes to set up the circuit ... this takes weeks

 

I did suggest that in my first post.

 

Then, the proper infrastructure for an F1 race must be put in place. This includes paying the F1 organisation US$8 million to rent portable pit buildings, $8 million to buy safety fencing and barriers, and then $14 million on renting grandstands. On top of that, a night races requires a specially designed and hugely expensive lighting system to develop an even light level over the entire track . . . Set-up for the first race takes two months; for subsequent races about six weeks!

I have no idea what they do in the 8 weeks to get Monaco ready for its daytime race. Back in 1999 I was involved in a study for the tourism organisation in Hong Kong on the cost/benefit/trouble etc. to get an F1 race up and running there. Once roads have been resurfaced (assuming that is necessary), they do not actually close any roads except on race day and the few days beforehand. And on the 2 practice and 1 qualifying days, the roads are only closed each day for a few hours.

 

What killed the Hong Kong idea was partly cost, but partly also the Environment Protection Agency. One F1 car zipping along at 250kph sends the decibel meters way over what is permitted there. 20 cars would have probably been heard as far away as Macau!

 

Granted, we don't actually know what closures will be required when they construct the safety barriers and run-off areas in Bangkok. For sure, though, traffic disruption in that area will be extensive over quite a period - and that's already dreadful for traffic most days. Plus there will have to be road closures to get all the VIPs and the tens of thousands of overseas visitors from their 5-star hotels over to the stands all over the circuit. As a Bangkok resident, I reckon I'll just take a few days off in Taipei and watch it all on TV from there

[Guest timmberty]

so you did FH i do appologise .. i sometimes skim the longer posts ... as you may notice i dont have a great attention span .. i read stuff then more often than not have to read it again as it goes straight thru ,,, so if i see a longer post i know ill never make it all

[Rogie]

,,, so if i see a longer post i know ill never make it all

 

An honest man!

 

I feel the same way when I join a discussion late on, by which time it has accumulated lots of replies.

 

If I am following it from the onset - no problem, but faced with 20, 30, 40 or even more replies by the time I get to it can be quite daunting sometimes. In such situations, it depends on the topic I suppose. If it's one that looks like it'll appeal to me I'll make the effort.

[Guest thaiworthy]

,,, so if i see a longer post i know ill never make it all

 

I agree with Rogie. This has happened to me in which I mis-read something or didn't read the whole thing. Hopefully it hasn't to many times and I'd like to think it's even happened to the best of us. As a result, you get a response that starts with "If you had read my entire post, you would have known that . . . "

[Guest fountainhall]

i do appologise .. i sometimes skim the longer posts

 

Absolutely no need, but thanks. Sadly, brevity is not a virtue of mine!

[ceejay]

I have just caught up with this thread. I don't think the traffic disruption will even be noticeable. Cars will be directed to an alternative area where they will be gridlocked - as usual - and motorbikes can be ridden along the sidewalks - as usual.

[Guest fountainhall]

This week the track for a 2015 Formula 1 night race in Bangkok was unveiled. As expected, it circles around the main sights of the Grand Palace, Wat Phra Kaew and Wat Pho. No doubt it will look stunning on television. But major complaints are already being voiced, one being the effect on all the national monuments and the residents in the vicinity.

 

The noise pollution problems will be huge, especially in an area that is quite heavily populated. According to The Nation, the Pollution Control Director General has declared that the noise level in decibels will be between 125 and 130 dB

 

 

". . .which might be compared to road-construction equipment."

 

The highest noise levels in Formula One are between 125 and 130 decibels, which might be compared to road-construction equipment, Wichien said.

People next to the track would need ear protection, while 100 metres away the noise level would fall to around 105-110 decibels.

The standard level for workplace noise should not exceed 105 decibels for more than one hour. But race fans would be exposed to bursts of high noise for much shorter periods, Wichien said. 

 

 

All of which shows the complete lack of knowledge of those supposed to protect the environment. Most authoritative sites confirm the dB level of one F1 car at full throttle is actually 147dB. That is stomach curning if you are close by! Plus ear damage starts at prolonged exposure to 87dB. And, importantly, 147dB is actually something like 17 times louder than 130dB!

 

And clearly the Director General fails to realise that there will be not one, but between 22 and 24 cars on the track, many bunched up close as with other street circuits. So the actual dB level will be far higher. And it will last for 2 hours on four consecutive days.

 

As for the suggestion that the noise falls away quite rapidly, that is utter nonsense. Noise falls away over quite a considerable distance (I can easily hear the loud noise of fireworks from the river nearly 4 kms away) and is only deflected if there are obstacles in its path. There are few really high buildings in that area. My bet is that the noise will even be very loud at Siriraj Hospital across the river where his Majesty resides. Because of that alone, all bets on an F1 race actually happening on that route surely have to be off! Hong Kong cancelled plans for an F1 race more than a dozen years ago precisely because of the noise pollution issue.

 

http://www.decibelcar.com/menugeneric/87.html

[Guest]

A Grand Prix lasts less than 2 hours.

Plus less than 1 our qualifying on the Saturday & a few short practice sessions over the 3 days.

Residents can wear earplugs for the short period of time when the cars are running.

 

Places like Monaco are delighted to have F1 on their streets once a year.

[NIrishGuy]

I'm guessing the people at the top who stand to make large amounts of money from F1 coming to Bangkok could care less about the local population and as to whether they might need to wear ear plugs or not as they'll be too busy away counting their legally gotten backhander gains no doubt. 

[ChristianPFC]

(I have read only part of the thread, but still want to add my opionion.)

 

I think all motorsport is utter nonsense and would immediately abolish it if I had the power.

 

That includes F1, motorcycle race, boat race. Pollution and noise!

 

Around the Grand Palace? Then I won't be able to go there to look for street hookers any more!

[Guest fountainhall]

Anyone can pooh-pooh the noise pollution, but it is a huge issue. Comparison with Monaco is really not valid. Monaco has had an F1 race since 1929. It brings the glitterati and huge sums to the Principality. You only have to look at the yachts in the harbour to get an idea of the mega amounts of cash which flow from the race. No doubt, there will be a lot of tourists coming to Bangkok especially for the race. But if BKK repeats what Singapore does, there will be a surcharge on all hotel rooms for that week to help pay for the shindig. Plus all hotels will in any case jack up all rates to the maximum possible. So unless you are coming to watch the racing, avoid the city around that week.

 

And Christian is correct. On both the Saturday and Sunday evenings, whole chunks of the area around Saranrom Park will be closed off and the money boys will have no access.

[Rogie]

That includes F1, motorcycle race, boat race. Pollution and noise!

 

 

Your post is mostly tongue-in-cheek surely. . .

 

Boat-racing is very popular im many countries, certainly including Thailand, as well as the Olympic Games. If you extend that to yacht-racing the Americas Cup is world famous.

 

When I was in Pattaya - Jomtien last December they had a Jet-ski competition. Now, I'm no fan of those 'wet bikes' but hundreds of people were enjoying the spectacle and yes, there was a certain amount of noise, but far from deafening. As for pollution, I have no idea, there must have been some (but then the sea off Pattaya - Jomtien has been a joke for a long time now, or have you never ventured into the sea yourself Christian?).

[Guest]

And Christian is correct. On both the Saturday and Sunday evenings, whole chunks of the area around Saranrom Park will be closed off and the money boys will have no access.

Considering practice starts on Friday, I would assume it will be closed off on Friday & possibly even Thursday evenings too.

 

You will need to find your boy earlier that week & get his phone number.

[Guest fountainhall]

Yes, the track is indeed closed for testing and practise on both Thursday and Friday. I am just not sure about night races and whether the testing is done under the lights or in the daytime. Whatever, the conclusion is the same. Christian will have to find pastures new for that week.

[Guest joseph44]

Well, problem almost solved.

The F1 may be moved up-country, probably E-san.