The F1 quest: It's fast and furious but not clear

 

Details on the investment, potential returns, examples of success and how we can emulate them, among others, are seriously lacking.

Anyone who has been to a Formula One race would know that it is an expensive sport. My first experience was the country's first race in 1999 and I wanted to buy a t-shirt to remember the occasion. I recalled looking at the prices and ended buying a key-chain instead. Even that was a bit too much for a key-chain, I thought.

Now the country wants to have an F1 team. The most obvious question is why? The explanation is that it will raise our profile, in other words, brand Malaysia would be out there for the world to see.

Fine, but we already have a race in Kuala Lumpur and F1 is not a mass market sport. It has a cult following but football has a bigger audience. I don't think I need to have published numbers, you could just walk into to a mamak restaurant when Manchester United is playing against Liverpool and compare the crowd with an F1 race on television.

Secondly, can we afford it? Hopefully no taxpayers money will be involved but that seems highly unlikely. So far we have been told that the bill will probably be split four ways between Datuk Kamarudin Meranun and Datuk Tony Fernandes of AirAsia Bhd, chief of the Naza Group S.M. Nasaruddin S.M. Nasimuddin, and Proton Holdings Bhd as the constructor of the car.

I'm not worried about the businessmen, but what about Proton? Although it has quite a bit of cash, RM914 million as at March 31 2009 to be exact, the car business needs a lot of cash for research.

In fact, it spent about RM500 million on Exora, the multi-purpose vehicle. And it actually gets a grant from the government for research work. It received RM275 million in total for the last two years. So taxpayers' money is actually used to help Proton. Does this mean the government will pump in more money in Proton for the F1 venture?

We also want to have full facilities in Sepang, where the current race track is located. The investment in things like a wind tunnel could run up to billions, admitted the Sepang International Circuit chief. Will the government pay for this?

Thirdly, if it's for technology, Proton had focused on performance or so called sporty cars before. What it found was that people actually wanted family cars. Proton also already owns Lotus, a good brand for auto engineering. Has it managed to fully use Lotus to help boost sales?

The F1 team will need at least RM10 billion over 10 years. Football would have been a cheaper option I believe. For example, if we became shirt sponsors for Manchester United (or Liverpool or Chelsea for that matter), the record so far is a reported STG20 million (RM114 million) a year for four years. That would amount to STG200 million or roughly RM1.2 billion for 10 years.

The three teams are good bets to become champions, which is great for any brand to be associated with, and even if they don't win, they would probably be in the top three, ensuring loyal fans throughout the world.

As a sponsor, we can take advantage of this and help Malaysia develop the football talent that we already have. We can learn how they train and improve players. There are far more successful Asians in top-flight football than in F1, I believe.

I might be missing something in my analysis of the F1 venture, but I would gladly be proven wrong. What concerns me is the fact that the explanations were not enough to convince me. Details on the investment, potential returns, examples of success and how we can emulate them, among others, are seriously lacking.

We have had the Sepang track for 10 years now and the benefits of the race on tourism have been significant. What are the additional benefits if we have a team? Petronas has also been involved in F1 for almost the same time and maybe the government can share what the oil and gas giant has gained so far.

Should we attempt big things? Sure, by all means. But let's have more meaningful success stories like the ones shown by AirAsia for example. We surely need more of that and Fernandes has shown that it can be done.