Precidents work…

21 Jun, '06

Take for example this year’s F1 season opener in Bahrain which garnered much better television viewer figures than the traditional opener held at Australia, that – business-wise – should be enough to move that fixture permanently to the BIC in Bahrain, and it looks like Bernie is considering it.

And why shouldn’t he? The BIC has brought in BD 116 million last year and looks on track to bring in even more this year. All for an initial investment of BD 150 million, according to the GDN anyway, and we all know how reliable that paper can be. I’m skeptical at the figures because they look believable – as far as the revenues are concerned – if they are expressed in US Dollars rather than Bahraini Dinars (a Bahraini Dinar is equal to 2.65 US Dollars); how can an investment of BD 150 million return most of that investment in one year? I’m sure that the drug lords are envious!

There is no other way to find out the actual revenues because they apparently do not produce any annual reports, and if they do, they don’t post them on their website. I can ask I suppose, but this is not an investigative journalism piece, just various thoughts that crossed my mind as I was reading the GDN earlier. Even if the revenue numbers are wrongly represented in BD and they actually are in US$, last year’s revenue still constitutes a revenue-to-initial investment ratio of 29%, which is huge, and that is for a single year! I don’t know what their net margin is though…

If, on the other hand, that these numbers are actually correct, then more power to you BIC and everyone who sails in her; I have no problem their past success and wish them a lot more in the future… it just sounds a bit incredulous to me.

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Comments (11)

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  1. nibaq says:

    All accounting rule “you get what you measure”. So if you are just looking at the profits from the BIC you will only see the change in the profits of BIC. Personally I see the benefits of the BIC as bigger and better than monetary. It is a great PR campaign, tourist sight and even a landmark.

    I know some friends from Kuwait who have gone there to race, and even train. I have an American friend who plans to move there and sees the BIC as a great place to spend some time on the weekend racing.

  2. NomadicArab says:

    Funny that they give no insight to their bottom line. Nothing too impressive about soaring revenues when accompanied with even faster expense growth. As you mentioned, would be interesting to see what their margins are like.

  3. Hulk Hogan says:

    I really don’t know how the game works!!

    Do BIC pay FIA to host such an event?!! or FIA does pay! Tickets are the only payment!! Another agreement!!

    When they say, Arcapita Bank, Batelco and Bapco are Official Parteners. what is really they’re role in there? get revenues? or they just put in some money??

    ADs around the circuit on a such event .. who does really get their revenues? BIC, FIA, Teams, shares??!!

    On the other side, we see Mr. Hulk Hogan Mr. James Hogan every year handling the “Prize” to the winning team? how much do they really pay to get such an honor?

    Are they really making some money?
    or the government set some budget for them, and at the end of year they find they still have some money left out of it, Bingooo, this is our profit?!

    I’m very curious on what is really going on there!! Anybody have any info??

    Any info would help ..

  4. Khalid says:

    I read the article about the revenues, it’s incredible that you can actually net that much in a single year.

    I’d love to see Bahrain stay as the opening race and I do agree, the timezone plays a very important role, cause we’re right in the middle which is convenient for both Asia and especially Europe. I have read though that Melbourne will host the first race of next year. Am sure that Bernie will consider it. If I ever bump into him as he loves down the street, I’ll talk to him about it ;).

  5. punk rock.. says:

    the “BIC”, is truly the home of motorsports in the middle east. i for one am facinated by the whole concept of on track and off track facilities, even my children are bitten by the “bug”. the facility as a whole is a great venue, to learn in a controlled environment opposed to street racing and losing lives in the process. i am pro safety, and i want to come back home and live to fight another day. the sport in general has a price tag to go with it, therefore the track has to charge us for its use. another great advantage of having a well designed venue, is its ability to house various driving schools, which offer classes and on hands driving instruction in well built machines. i will have to expand on this aspect later on, in all aspects its a money maker or cash cow that attracts people from the middle east and abroad. well done to the boys at the “BIC” the season opener rocked, just think about the show staged by “Red Bull Racing” at the island on the “Ritz” it took the crown. forget montecarlo, its not within our reach but the “BIC” is tailored to all pockets, and what a facility.

  6. skribe says:

    iirc, melbourne have just renewed their contract and it stipulates that they get the first race of the season.

  7. punk rock.. says:

    the “BIC”. is an economy of scale it has created life in the area surrounding it. it was just barren land and a wife sancturay “al areen” that later on became a sprawling real estate development. the university, was the most promeninet landmark, but know you have a fantastic service station with restaurant and gas facilities. think about it, from barren land being transformed into a resendital community with its own attractions ( the lost city of dilmun), and five star hotel and spa. before the end of this race season, the hotel and spa will be function and next year the rcae going fans and drivers will have a new venue to stay for a few days. the track, has spun a whole new economy of scale, even the german sports can tuner “RUF” in a joint venture with a Bahraini firm will build its assembly plant on the doors of the “BIC”. the cars will sold at much cheaper price than europe due to “no taxation”, and just the amount of jobs it and other related industries to the automotive sports segment will generate money into the local economy. i support these types of move that are beneficial to the local economy, image a day when you can actually have a racing team based in “bahrain”. i am you biggest fan, therfore i am.

  8. Anonymous says:

    how can an investment of BD 150 million return most of that investment in one year? I’m sure that the drug lords are envious!

    1) The land is free
    2)The construction company are still waiting for thier cheques to come through the mail YIKES!!
    3) Cheap labor

    Mahmood thats why they are making so much profit, For God’s sake if this was built by the private sector the F1 would have kicked of (if thier lucky) by 2020.

  9. mahmood says:

    What do you mean that the construction company is waiting for their cheques? From my information, not only were they paid in full, but because they finished one day ahead of schedule they received a hefty bonus!

  10. Darth says:

    Well, Its interesting the GDN doesn’t seem to realize the difference between Dollars and Dinars, and uses them interchangebly, but the figure they quoted wasn’t of profits but of revenue. And, initial investment aside their running costs (Labor, Telecom, Fees paid to the FIA, Maintenance, Marketing, etc.. are pretty high) Therefore, What the GDN should have stated clearly was that the BIC is making more and more money every year from the F1 and numerous events being held there. Thus, the revenue is rising….but the “Profits or Loses” aren’t known to the general public atleast not to my knowledge.

    But it takes a while for a big project like that to cover fixed, and variable cost.. and reaches the point where it turns out a profit. It would be nice if the financial statements were released every year for people to see. And, I think its quite likely to happen with the new Government Holding Company.

  11. jc says:

    one word: NASCAR

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