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GP Week : Issue 181
9 GPWEEK.com // 9 GPWEEK.com // PARTNERS: Much ink has been spilled over the cost of hosting a Formula One Grand Prix. It doesn’t matter whether you’re talking about the BRDC-funded British Grand Prix, or one of the plethora of new races sponsored by regional governments looking to boost their profile – F1 is an expensive business to be in. Speaking off the record to those involved in staging races around the world, one thing is consistent – mention Bernie Ecclestone’s in-built annual escalator, and those responsible for paying the bills wince briefly before coming out with a media-friendly statement about the benefits of Formula One to their country. The rhetoric is all good and well, but it’s the winces that interest me. There is a good argument for saying that the current system is unsustainable, that even oil-rich nations are finding it harder to justify the cost of hosting a race. But that is when you look at grands prix on a micro level – true, they cost more to put on than they bring in, but micro is only a small part of the picture. Talking to officials at the Bahrain International Circuit this weekend, I said that what impressed me about their race was the way in which they were approaching the grand prix as a macro event, not a micro one. Their faces lit up – apparently ‘macro not micro’ was the first line in the proposal document drafted when the Bahrain Grand Prix was but a twinkle in the Crown Prince’s eye. As part of the sideshow to this year’s race, the Sakhir circuit organised the Business in Formula 1TM forum, a three-day event in the Paddock Club that combined global business leaders – including but not limited to F1 sponsors – with senior figures inside the sport. Panellists included the executive director of UBS Wealth Management, the CEO of HSBC Bahrain, the president of Ericsson Middle East, and the CEO of Mumtalakat. On the agenda were discussions on the impact of combining sports sponsorship with business networking, the financial impact of Formula One on its host nations, and F1’s unique role as a combined networking platform and media and communications opportunity. It is inside those unquantifiable spheres that Formula One has its greatest financial impact. But it should also be remembered that F1’s financial reach extends far further than the paddock itself – hoteliers, restaurateurs, and taxi drivers (to name but a few) also feel the benefit of a race. A Nielsen study conducted in Bahrain found that while 77 percent of respondents were in favour of the grand prix, an impressive 90 percent approved of the race’s financial impact on their country. While the rarefied confines of the Paddock Club are beyond the reach of most F1 fans (even members of the travelling circus need special passes to get inside – traditional paddock passes aren’t hoity-toity enough), it is a vital component of F1’s macro impact. Sure, champagne is quaffed and massages booked in the spa facility, but it is also the scene of the wheeling and dealing that makes F1 such an attractive prospect to business leaders. The Paddock Club gives sponsors both prospective and actual the opportunity to hob-nob with global decision-makers in a casual environment. Rather than working your way through 16 levels of personal assistants to make a five- minute appointment with the high-level executive of your choosing, simply sidle up to him at the bar and make your pitch in a relaxed environment. In countries with a heavy government investment in Formula One, the Paddock Club becomes even more important – not only can businessmen and women make deals with their counterparts in the world of business, but they have an unparalleled level of access to senior decision-makers and government representatives who would ordinarily be out of reach. Bahrain was one of the first countries not only to understand the concept, but also to put it into practice. That may have been because many of the high-level corporate roles in the small island nation are filled by members of the elite ruling classes, either government officials themselves or the cousins of those in power. Invite x CEO and y government minister will come along for free, increasing the value of a Paddock Club ticket for anyone wishing to do business in Bahrain. It may be a micro-sized country, but they have managed the business side of Formula One with an undeniably macro approach. THE BUSINESS OF MOTORSPORT OPINION OPINION KATE WALKER Editor Paddock Club Singapore