The significance of Formula One and the Bahrain International Circuit to Bahrain

8 Mar, '04

Over 2.5 billion people watch every single formula one race. And an average of 100,000 people attend the event physically. Think about it.

In effect, the Formula One circus equates to a Football World Cup or the Olympics. The difference of course is that instead of the events happening every FOUR years, the F1 happens every two weeks! It is the second most watched live sporting event in the world.

It is a known and proven fact that the immediate revenue for the host country (direct and indirect) of every single Formula One weekend goes well beyond tens of million of Dinars.

The Formula One event has contributed greatly to tourism in every country it has ever been held in. Apart from the “tifosi” who travel the globe to be with every Formula One race, many motor-sporting enthusiasts and supporters will come to Bahrain to spend their time and money, not just at the track, but in hotels, shops, restaurants and various other outlets.

It is well worth remembering that the Bahrain International Circuit is a multi-purpose major motor-sporting arena which is the most advanced in the world. It includes a Formula 1, a drag-strip, and an oval track. Even the Chinese circuit which costs twice as much does not compare to the facilities we have here, it is certainly less “cultural-like”.

Just a glimpse at the Bahrain International Circuit and one cannot miss the cultural import of the architecture, let alone its utility to the local economy. It embodies our heritage: wind towers, tents, and desert, married with the most advanced facilities Formula One has yet to experience. A true embodiment of the Arab soaring spirit. It is truly fascinating, kudos to our Crown Prince Shaikh Salman bin Hamad, the main visionary of such a mammoth enterprise.

The activities it will host is not limited just to Formula One. It’s also going to have go-kart, motor-cycle, drag-racing and other motor-sporting events. One important revenue stream will be car manufacturers’ testing where they will bring their newest concept cars to test in typical Middle Eastern conditions, where else can they do that in the Middle East now?

So although the build cost is perceivably high at BD 57 million, the country more than will recoup that investment in just a few years.

On the intangible side, the gain that the Bahrain International Circuit will contribute to Bahrain is international recognition and publicity. No other activity will bring Bahrain as much recognition as the Formula One races; for about 90 minutes every year, Bahrain is going to be the center of the world, watched by some 2.5 billion viewers! And this is completely free publicity! For the mathematically inclined, multiply those 90 minutes by what it costs to normally advertise on TV advertising slots which are normally charged in segments of 32 seconds, and you will get the picture.

It’s estimated that the event will be broadcast by more than 90 television stations around the world, live, from Bahrain, reaching those 2.5 billion viewers. Even if less than 1% of the viewers come to Bahrain for a holiday every year directly due to the Bahrain International Circuit, or feel encouraged to conduct business with a Bahraini company, it translates into a lot of jobs and opportunities for Bahrainis.

In the short term, most of the foreign visitors to the formula one event in Bahrain are normally wealthy individuals, and judging by the revenues generated from them in other circuits, they will spend much more than the average tourist. This of course is in addition to the money that will be spent by the teams themselves. The F1 entourage is expected to exceed 2,000 people who should be treated as our honoured guests who will spend a lot more than a normal tourist.

Translated in real terms, this means an increase in revenues from tourism, increase in foreign direct investments, increase in joint-venture firms, increase in jobs, increase in advertising and sponsorship spend, increase even in technologies and manufacturing enterprises associated with car manufacturing. It is not too far fetched for Bahraini engineers to contribute to engine and various other car parts’ design and construction. A whole new industry will grow around this circuit and will provide much needed non-transitory jobs in areas not catered for or maybe even not thought about at the moment.

It is wrong to think that the circuit’s impact will be limited to just the tourism and hospitality industries.

With its planned driving and racing schools, it will contribute in another way to the country as well. It will raise a generation of safer drivers! And before long, we might even have a young Bahraini driving in the Formula One races too.

Although the sport is expensive, revenue generated by it is huge. Melbourne’s Sunday Herald Sun described the Formula One as that giant vacuum cleaner that sucks up money at an alarming rate, but also brings in an annual revenue of more than BD 100 million.

For example, the Australian Grand Prix event some BD 4 million has been invested in advertising, promotions and marketing for the four-day period and at the same time the Melbourne business community were reported to have generated an income close to BD 20 million. Even the official caterer for the Grand Prix made an access of BD 2 million in profit, catering to some 400,000 spectators who turned up throughout the four days1.

The concern now is not the money or jobs which will be generated aplenty by the Bahrain International Circuit. It is predatory politics. What is feared is that opposition groups be they Islamists or other parties might willingly sabotage such an important event for selfish and personal gains, or at least unwittingly doing so under the guise of “cultural values” which they themselves impose on our community, as they have done before.

We have already seen the impact the Islamists have had with the Nancy Ajram concert, and recently with the chasing out of capital when they successfully stopped the production of the Big Brother television program. The effects of these two actions might be too soon to ascertain, but the general business consensus indicates the impact to be major and probably lasting.

No longer will a television station consider Bahrain as its base, no producer will consider filming in Bahrain, and an entertainer will think many times before mounting a concert here.

Apart from the immediate negative impact the country suffered, a far more dangerous aspect must be considered due to these actions: a huge loss of opportunities for the community at large, and loss of reputation for Bahrain as being a diverse cultural and multi-ethnic society. We are now viewed by the world as simply a harbour for extremists.

What might these extremists do during the inaugural Formula One race remains to be seen, but judging by past experiences, they will probably do something to muddy the waters and further entrench the view that we are not receptive to, and what ultimately will be translated as hostile to foreigners and foreign investment.

They will politicise the event by branding their actions as “constitutionally guaranteed” or “democratic.” In doing so however, they will demonstrate without a shadow of a doubt their selfishness, un-patriotism and as importantly their complete disregard for their national duty.

If a negative campaign is mounted no matter what guise it takes, it will be nothing less than holding the country hostage, with dire consequences for the community in the long run. Destroying such an event will not be recovered from.

What the opposition forces and the Islamists should do, if they are indeed patriotic and want the best for their country, is diligently work at the success of this event. Nothing less will be acceptable.

[1] Formula 1 Racing, the Economy and the Environment

Filed in: General

Comments (7)

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  1. anonymous says:

    The significance of Formula One and the Bahrain International Circuit to Bahrain

    Mahmood,
    Very interesting blog. It is great to see a moderate Arab voice like yours.
    Living in Israel, I mainly only hear about the Arabs who want us wiped off the planet. If there were more voices like yours, not only would we have peace, but perhaps all the countries in the region would enjoy prosperity.
    I commend you for your rational approach. Feel free to pop in on my blog again and illuminate us all with your comments.
    Enjoy the grand prix!
    Dave (http://www.gravett.org/Israellycool/)

  2. mahmood says:

    Re: The significance of Formula One and the Bahrain International Circuit to Bahrain

    Thank you very much Dave. I hope, even in a miniscule way, that this will help us both understand each other better, and hope too that this will be a seed to finding peace.

  3. anonymous says:

    The significance of Formula One and the Bahrain International Circuit to Bahrain

    I hope so too, mate.
    I have added you to my blogroll, and will be sure to visit this site regularly. 🙂
    Cheers,
    Dave (http://www.gravett.org/Israellycool/)

  4. anonymous says:

    The significance of Formula One and the Bahrain International Circuit to Bahrain

    Mahmood,
    I’m new to F1, and don’t understand what the word tifosi means, can you elaborate?

  5. anonymous says:

    The significance of Formula One and the Bahrain International Circuit to Bahrain

    hi..am new and have little information about F1… i have to do a research on the effect it had on bahrain tourism..and if this would lead to more successful projects and opportunities..if u would plz help, i’d be gratefull..thank you!

  6. mahmood says:

    Re: The significance of Formula One and the Bahrain International Circuit to Bahrain

    Of course, ask and ye shall receive! Probably you best bet though is to contact the Bahrain Centre for Studies and Research as they have published a sizeable account of how F1 impacted Bahrain business and how much revenue is expected over the next few years directly from this event.

  7. anonymous says:

    Re: The significance of Formula One and the Bahrain International Circuit to Bahrain

    tifosi is an italian word: it means “supporter”, “fan”!

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