A flurry of colours throttle by in a split second, accompanied only by the scream of engines and the smell of burnt rubber.
Spectators, grateful for the information fed through commentary and a web of live cameras, cheer on their feet before settling down to get seated again.
The night is warm and humid, made stickier through the perspiration of over 80,000 people.
This is what 29-year-old Hamizan Harith, a physical education teacher, looks forward to every year since 2019.
Hamizan even volunteered to be a track marshall for the Singapore Grand Prix (SGP) 2022 and 2023, where he helped clear debris and ensure the safety of the competing drivers.
“I didn’t go for the race but for the Formula One (F1) concert that year. But little by little, I was sucked in by the loud noises and the commotion, and I ended up watching the race from a distance,” says Hamizan.
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An automobile enthusiast, Hamizan enjoys understanding the technical aspects of each car, from the aerodynamics of the vehicle body to how this translates to engine efficiency.
And then there are the rock stars; the drivers. He says, grinning: “My favourite is Lewis Hamilton because he’s already 39, but he’s still putting up good performances. He just won his home race at Silverstone in the UK this year; it’s incredible.”
“Max (Verstappen) is a good driver, I’ll give him that. But his personality can be too aggres- sive at times,” he adds.
Impact on Singapore’s economy
Hamizan is not the only person looking forward to the F1 weekend.
Hotels, retailers, restaurants, food courts and the rest of Singapore, including the Singapore Tourism Board (STB), view this important weekend in September as a windfall.
Hotels around the Marina Bay circuit charge upwards of $1,000 a night, based on The Edge Singapore’s channel checks.
The 10-day long Grand Prix Season Singapore (GPSS), which features adjacent events across Singapore, complements the three-day F1 Singapore Airlines C6L Singapore Grand Prix.
Thilan Wickramasinghe, Maybank Securities’ head of research, says: “The F1 does have a ma- terial impact on tourism receipts, which in 2023 was around $27 billion. The overall contribution to GDP is small, though, at roughly 0.3%. However, we think the event gives Singapore a major global branding opportunity and is also an avenue to extend soft power.”
Singapore’s Ministry of Trade and Industry (MTI) says the Singapore F1 event has generated around $2 billion of incremental tourism receipts since its debut in 2008.
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“The race itself supports tourism and race support services. Other aspects include promoting Singapore on the world map, which could reap future benefits for global businesses to be present here,” say RHB Singapore analysts Vijay Natarajan and Alfie Yeo.
The GPSS event is the only one in Southeast Asia after Malaysia decided to drop the race in 2017 due to dwindling ticket sales and rising costs of hosting the race.
Singapore will be hosting the night race until at least 2028, according to its latest contract.
“Singapore is uniquely positioned as one of the best races in the F1 calendar; being the first night race and leveraging Singapore’s beautiful world-class cityscape brings buzz to the entire city centre. The event has opened up substantial business opportunities, contributing to the growth of our F&B and nightlife sectors,” says Joseph Ong, managing director of Singaporean lifestyle F&B group 1-Group, formerly known as One Rochester Group.
It is not just the F&B and hospitality sectors that will see a boost thanks to this event.
Ong Ling Lee, executive director of sports and wellness at STB, shares that the Meetings, Incentives, Conferences and Exhibitions (MICE) industry, too, will benefit.
“Many international business events, such as the Milken Institute Asia Summit and SuperReturn Asia, are organised around the F1 race in Singapore to take advantage of the occasion for high-level networking and meetings,” says Ong, adding that GPSS helps enhance the experience for these delegates, providing them with the opportunity to leverage the festivities to cultivate meaningful business interactions in relaxed settings.
GPSS also provides a meaningful platform for homegrown brands and businesses to showcase their offerings to our local residents and an international audience, Ong adds.
This is where programme partners like 1-Group enter, offering race-themed experiences for fans and tourists and a prime location for business networking, facilitating valuable connections and supporting business growth.
Unravelling the F1 ecosystem
What is the F1 Grand Prix? This year, 10 teams and 22 drivers will compete in a season across 24 locations globally.
At the end of the nearly year-long affair, the driver with the most points is crowned the Drivers’ Champion and the team with the most points is given the Constructors’ Championship.
The season concludes by November or December in Abu Dhabi, before the cycle repeats itself as early March rolls around.
Like the F1 car, the competition is a sleek machine pieced together by a dizzying array of parts, only hinted at by the sheer number of logos pres- ent at each race on the cars, tracks and stands.
The fuel that makes this run is revenue and spectatorship.
Primarily, all teams compete for a prize pot at the end of each season, split across all 10 teams based on each team’s final standing.
The reward consists of 50% of the revenue earned through commercial rights by the competition’s promoter, the Formula One Group.
This mostly stems from global broadcasting rights.
In a 2023 report by equity research platform Seaport Research Partners, global media rights were expected to top US$1 billion ($1.3 billion) last year, reaching US$1.4 billion by 2029.
Race-sanctioning fees paid by event promoters are another major source of income, with profit varying from country to country. Hosting a grand prix typically costs around US$31 million on average, though fees differ based on the location.
Historic circuits like Monaco enjoy lower fees due to their long-standing significance.
At the same time, newer venues such as Qatar and Saudi Arabia are willing to pay higher premiums to secure a spot on the F1 calendar.
In an August 2023 reply to a parliamentary query on the total cost of organising the 2022 F1 Singapore Grand Prix, Minister of Trade and Industry Gan Kim Yong said the total cost was between $135 million and $140 million, of which 60% was footed by the Singapore government.
The amount entailed racetrack maintenance, the setting up of infrastructure for grandstands and hospitality suites, and the provision of security and medical services during the event.
In the 2023 season, F1 revenue came in at US$3.2 billion, resulting in a US$1.6 billion reward for the teams.
Of this, Austrian winners Red Bull Racing received around US$140 million in prize money, while 10th-place Haas earned about US$60 million in winnings.
As the event’s original participant since its inauguration in the 1950s, Ferrari also gained a special 5%, or US$122 million, from the prize pool on the back of coming third in 2023.
Drivers, on the other hand, largely do not benefit directly from podium finishes at the end of a season.
They earn a salary based on experience and success, with bonuses depending on certain wins per race.
Verstappen is a three-time Drivers’ Champion.
This season will be his ninth with the Austrian outfit, and his contract until 2028 will see him earn around US$55 million annually. Conversely, up until two weeks ago, the recently-axed rookie Logan Sargent was drawing a salary of US$1 million from his British employers, Williams Racing.
Sargent was into his second year in F1, but a string of poor performances led to his release.
Nuts and bolts of F1 fees
Beyond the basic fee structure of the Formula One Group, partnerships play a massive role in the Grand Prix.
Lifestyle brands want their logos associated with the grand sporting event, and component manufacturers boast of being able to power some of the fastest cars in the world.
One group that has long been linked with the event is Rolex, which invests US$50 million annually in F1.
The Swiss watch manufacturer has been the official timepiece for the event since 2013, with Rolex’s pit lane clock gracing every grand prix and its iconic golden crown proudly lining F1 circuits around the world since 2013.
LVMH is in late-stage talks to become a major sponsor of F1, according to a Sept 11 Bloomberg report.
The Paris-based company is reportedly nearing an agreement where watchmaker Tag Heuer as well as other brands, will become sponsors of F1. Another global partner of F1 is Saudi Aramco.
The world’s largest oil producer has had a sponsorship deal since 2020, with trackside branding at most races, title rights to the US, Spanish and Hungarian Grands Prix in the same year, as well as broadcast integration and exposure on F1’s digital platforms to showcase Aramco’s position as an “innovator” in transport technology.
With its stylistic red art-deco font, the logo of Italian tyre manufacturer Pirelli also cuts a familiar figure on the grid.
The company’s history with the Grand Prix goes back to the 1950s, and its tyres have been standard issue for all teams since 2011.
Pirelli’s range of six F1 tyres are specially designed to be single-use, with differing compounds suited for various race conditions.
The Italians’ contract runs up to 2027. Japanese competitor Bridgestone will look to challenge Pirelli as the event’s exclusive supplier.
When it comes to teams, sponsorship deals are the most lucrative way to generate revenue.
Technology, too, plays a pivotal role in how teams perform.
In 2022, Red Bull Racing signed a five-year, US$300 million deal with American database management company Oracle.
Oracle Cloud Infrastructure conducts billions of simulations exploring various race scenarios and their potential outcomes for Red Bull.
Meanwhile, Malaysian oil and gas group Petronas signed an extension with Mercedes last year, set to kick in from 2026 following the current US$75 million per year contract.
In 2023, the F1 event and the 10 teams were supported by over 300 corporate sponsors.
McLaren’s 2024 F1 car prominently sports the logos of Google Chrome and cryptocurrency exchange OKX across its black and orange body, while the purple livery of Williams Racing equally displays Duracell and Komatsu.
Tata Communications’ network infrastructure and AI-powered analytics ensure a seamless viewing experience of the entire track.
Elsewhere, F1 uses Salesforce’s AI CRM platform, Einstein 1, to unify fan interactions from var- ious sources such as F1 TV, race-day pop-up stores and social media.
Coming full circle but only faster
With F1 growing in popularity year after year, teams and drivers are pushed to go faster than ever before, and the way to do so is with better race cars.
Between seasons, teams use the winter break to engineer improvements in hopes of challenging for consistency or a better podium finish.
Historically, teams with larger budgets, like Ferrari and Mercedes, have dominated the sport.
However, price caps have since been introduced to level the playing field, with 2023 seeing a standard budget of US$135 million for all teams.
The remaining cash held by each team goes to paying drivers, staff members, travel fees and any entity that is required for the team to operate for the new season.
With such slim margins, the true value of F1 lies beyond the circuit.
Companies participating in the event gain near-unparalleled global exposure, and the pool of fans is growing.
The average attendance per race in the 2023 season saw nearly 300,000 people, a sizeable increase from the pre-pandemic numbers of 198,330 in 2019 and 194,920 in 2018.
Three races achieved attendance of over 400,000 each, with some 432,000 spectators at the United States Grand Prix (432,000) a particular standout.
F1 has been a European affair historically, but recent data has pointed to a noted interest from an enthusiastic American audience.
According to ESPN, which airs the races, the 2023 season became the second-most-watched F1 season on US television, averaging 1.1 million viewers across 22 races, nearly double the 554,000 average in 2018.
In Singapore, Hamizan will not be resuming his role this year but watching the race at home, where he will try to beat Hamilton’s Singapore lap timing on his F1 simulator before the race begins.
As long as Singapore continues to host the event, Hamizan will remain keen on participating, either as a spectator or a volunteer.
“As an F1 fan and a Singaporean, having F1 here makes me feel pretty patriotic. Per- sonally, I hope the contract for the Singapore race will be extended beyond 2028. I’d love to experience more Singapore races.”
With additional reporting by Nurdianah Binte Muhammad Nur
