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| Date: Wed Mar 14, 2001 12:46pm Subject: Malaysia's F1 Success Fails to Draw Crowds, Sell Racing Tickets 03/13 22:48 Malaysia's F1 Success Fails to Draw Crowds, Sell Racing Tickets By David Yong Kuala Lumpur, March 14 (Bloomberg) -- Malaysia is finding out there's more to hosting a Formula One Grand Prix than a $112 million circuit and a home team that just won its first championship points. With less than a week to go before the second leg of the 17- round Formula One in Kuala Lumpur on March 18, Sepang International Circuit Sdn., which is hosting the car race, hasn't found buyers for about two thirds of the tickets. That's even though home team Sauber- Petronas scored its best start in the first leg in Melbourne about two weeks ago. ``Everyone thought F1 was a gold mine, but the response has been very bad so far,'' said Basir Ismail, chairman of Sepang International, a unit of Malaysia Airports Holdings Bhd. With the Malaysian economy slowing, Sepang's bet on the Formula One race, one of the world's most-watched sporting events, risks becoming another grandiose project in the country that's home to the world's tallest building and its longest driverless rail system. It may force Sepang to seek help from the government. The company, which manages a 5.5 kilometer world-class racing track it built in 1997, blames poor pickings for scrapping the live broadcast of the race by Sistem Televisyen Malaysia Bhd. and the customary race night dinner. Sepang has raised only 36.7 million ringgit ($9.7 million) through ticket sales, significantly below sales a week before the last two races in Kuala Lumpur. Shares of Sepang's parent, Malaysia Airports, are down to a year's low of 1.41 ringgit, reflecting weakening demand for services at its airports and other businesses as the economy cools. The economy grew 6.5 percent in the fourth quarter, its slowest pace in about 18 months. Once envied for winning a contract from Formula One's Bernie Ecclestone to host the Kuala Lumpur leg of the race for 10 years, Sepang and Malaysia Airports now face the prospect that they have a white elephant on their hands. Losing Money Malaysia Airports, which spends 100 million ringgit a year hosting the race, lost 23 million ringgit on last year's race and other related events. Broadcasting rights to out-of-cash Sistem Televisyen Malaysia Bhd. didn't help trim its 536 million ringgit debt. This year might be worse. Running a sporting event where each race is viewed by an estimated 350 million people may be too expensive for Sepang and will force it to turn to the government for assistance, company executives said. ``The group intends to seek support from the government to continue organizing world-class motor sports at the Sepang F1 circuit,'' said company secretary Muhammad Arshad. ``At the time we entered into an agreement to host the event, the exchange rate was 2.5 ringgit to a dollar.'' It needs 3.8 ringgit to buy a dollar now. The company also wants tax breaks, he said. Events surrounding the race this year included a Formula One powerboat race in the southern Johor state that drew a sell-out crowd in February. Digi.Com Bhd., Malaysia's sixth largest mobile phone operator, will sponsor a performance by rock group Deep Purple in one of the post-race performances. Corporate Support To get more people into the stadium, Malaysia Airports asked the country's large companies to buy some tickets. Technology Resources Industries Bhd., the country's biggest cellular phone operator, is offering a 15 percent discount on tickets to its subscribers, while No. 2 lender Commerce Asset- Holding Bhd. will give away 450 tickets to account holders in a slogan-writing contest. Sepang's Basir is unimpressed. ``The response from the corporates has been cold,'' he said, blaming hotels for raising rates and turning away fans -- a charge Malaysian hoteliers refute. Rates in Malaysia are lower than what fans paid in Melbourne in the first race, said Mohamed Khadar Merican, president of the Malaysian Association of Hotel Owners. International fund managers and investors, who swapped suits and ties for T-Shirts and caps last year won't make it this year. ``I think it comes too soon after October's race,'' said Ben Chan, research head at HSBC Securities in Kuala Lumpur, which invited some 150 to 200 fund managers to last year's race. HSBC is one of the Ford Motor Co.-owned Jaguar-Cosworth team's sponsors. For Malaysia, which prides itself as a venue for high-profile sporting events, Formula One's turning out to be a flop. Sepang's hopes that the roar of exhausts and the smell of rubber on tar will drag people to a day at the races are unlikely to be realized. |
| sepang f1 vinture |
| Date: Tue Mar 13, 2001 10:06pm Subject: F-1 Race Crashes Before It Starts Malaysian F-1 Race Crashes Before It Starts Harakah 15-31 March 01 By: MGG Pillai. THE MALAYSIAN LEG of the Formula One Grand Prix is confirmed a failure before it starts. With a week to go before March 16, when the race begins, only 30 per cent of the 94,000 tickets are sold. Hotels raises prices by as much as three times, insisting upon their maximum prices without discounts. Price gouging is the order of the day, that even FIA complains. The government claims it can do nothing about it, the same argument it gives about the Langkawi hotel rates when international conferences and events are held in Langkawi. But there are laws against price gouging and a ministry oversees it. Why cannot it act? Hotels claim they are doing well when they are not, and see events like the F-1 to cut their losses. Regular hotel patrons who come here on business and booked their hotel rooms six months and more in advance are suddenly told there would be a surcharge of 50 per cent and more. Worse, the Cabinet has ordered that TV3 not telecast the race live, to force people to go to the races. But should Malaysians be penalised for the organiser's failure to sell tickets? As it is, the race is an interesting diversion from the normal humdrum life, especially out of the main towns and cities. If anything, this would add to the list of complaints Malaysians have against the government. There was no international campaign to bring in the crowds; one Malaysian team that went to the Melbourne F-1 races, the first in this year's season, could only sell less than 50, no doubt wathing the races instead. And this amongst 140,000 sellout crowds, some of whom travel around the circuits to watch the races! If people are prepared to fly in from Europe and the Americas to watch the race in Australia, they could be persuaded to break their journey to watch the Malaysian leg on their return. The local organisers would not share the burden by getting motor sports clubs in the region to sell package tours that include tickets, travel and hotel accommodation. Singaporeans and Bruneians come in droves, but no attempt was made to sell them the tickets. As it is, only now is the attempt is made. They would fail. The travel would have to be planned in advance, often months ahead. The ease with which Malaysians, especially in high positions and civil servants, can drop everything on short notice and go on extended leave is not an option available to many in the world. To boost local participation, the Cabinet at its recent weekly meeting, ordered TV3 not to telecast it live. ASTRO telecasts it live though through one of its sports channels, and that cannot be stopped because foreign telecasts are governed by media contracts with the FIA, which organizes the Formula One races. That cannot be stopped. Those who want to go would go, live telecast or not. Those who do not, or cannot afford the tickets, would not, and neither with access to ASTRO, would be terribly angry indeed. More than that, those who bought the ticket at "early bird rates" of a ten per cent discount, after the F-1 race last year, now find they could be bought at 40 to 50 per cent off. The RM1,000 ticket -- the same amount the deputy prime minister, Dato' Seri Abdullah Ahmad Badawi, doled out to indigent Felda farm settles to overcome a worsening political problem of poverty and hopelessness -- works out at US$250, and correspondingly lower for the others, cheap enough for many Western, Singapore, Hongkong, Japanese, even Australian, men and women to fly in and watch the race. But not for Malaysians. But those who bought tickets last year were diverted on arrival to park their cars at the Putra Jaya mosque grounds. Buses were on hand to take them to the stand, but not when the races were over, and many had to pay RM70 and more by taxi for the short trip. Companies and organisations would be pressed to do national service -- indeed many have bought the tickets with no intention to use them, chalking it out to the costs of doing business -- but the hassles make it not their while to be at the track this weekend. The Malaysian today is cloaked in arrogance and the believe that somehow money will be found to fund the ever increasing desire for huge monuments that make no sense at all. This spree of mindless construction, often in secret and without parliamentary approval and oversight, allows the government to spend what it wants without approval. A new billion-ringgit convention hall is under construction and costing more than a billion ringgit, and we are not about it. The architect, recently interviewed, refused to say anything about it because he signed a non-disclosure clause. The government insists "off-budget agencies" -- Petronas is one - - can do what they like without parliamentary interference. So Putra Jaya is built in stealth, the prime ministerial palace blamed on Dato' Seri Anwar Ibrahim for its grandiosity "because he would have occupied it. It was the Prime Minister's plan, and he saw it through, with even the minor details within sight of a member of his family. And now the deputy prime minister's residence, not as grand but one fit for a potentate, is built, and Malaysians knew of it only when the newspapers had a feature on Putra Jaya recently. We are acquiring debts our great grandchildren will have difficulty paying. The Formula One race next week will add, without doubt, to the considerable red ink the Sepang International Circuit has acquired since it was built. How did this happen? In the previous two years, an international public relations group, which has amongst its clients the Malaysian Philharmonic Orchestra, and specialised European and American companies handled the nitty gritty. This time, Malaysians did it -- did not know how to organise it, and fell flat on their faces. It should have, for instance, organised ticket sales for this week's event at the airport when those who came six months ago were leaving. They should have had ticket agents all over the world. Even local companies who could have sold tickets were not allowed, because the controllers shareholders were not with the right Bolehland connexions. Their ignorance on what to do is monumental, the organisation shoddy, to say the least. The Petronas head of racing did not know, for instance, that his team is no more called Red Bull Petronas but Petronas Credit Suisse, with the change of sponsors. Besides, Malaysia's perennial cash cow, Petronas, cannot make ends meet, nor pay its bills except on deferred payments. The Trengganu government could well wins its case to be paid petroleum royalties and not collect because the Petronas till is empty. The Petronas heritage is at risk with mind-boggling wasteful expenditures, like the KLCC, Putra Jaya, KLIA, the Sepang International Circuit, and the Formula One races, shortcovering the government's drunken development sprees. Since Malaysians are not told what its heritage is, they would be shellshocked when the reality hits them when least expected. Even with excellent technical experts to run the race, which Malaysia does not have, Petronas does not have the money now to make it work. Yet, Malaysia has extended the right to hold Formula One Races till 2010 -- with a huge payment of several hundred million US dollars for the rights and an additional US$50 million or so annually to organise the race here. This delusions of grandeur worsen Malaysia's economic well-being. - MGG Pillai |
| F1 LOSSES WORRY MALAYSIA AIRPORT HOLDINGS March 13, 2001 WITH the second leg of the prestigious Formula One championship just less than a week away, Malaysia Airport Holdings Bhd (MAHB), which organizes the race, has reason to be worried. With ticket sales disappointing, with about 60 per cent still unsold, MAHB senior officials are even mulling plans not to allow the race to be telecast live on Malaysian television stations, much to the chagrin of F1 enthusiasts. If that does happen, then it would run counter to Prime Minister Mahathir Mohamad's plan that the F1 be an event for the masses. The F1 is held at the ultra modern Sepang circuit - another of Mahathir's high profile projects - a short hop from the Kuala Lumpur International Airport in central Selangor state. MAHB has more reason to be worried, judging from its poor balance sheet. MAHB, which operates the country's airports, has attributed the sharp fall in its earnings for its financial year ended Dec 31 last year mainly due to the hotel divisions and in event management. Its net profits fell 55 per cent 126 million ringgit from 274.62 million ringgit a year earlier, according to its recent statement to the Kuala Lumpur Stock Exchange. Turnover was about 10 percent higher at 900 million ringgit last year, compared with the 817 million ringgit a year earlier. According to MAHB, it made a net loss of nearly 18 million ringgit for October to December because of organizing the F1 event in October and start-ups -- such as its subsidiary Asia Pacific Auction Center Bhd. For this year, Malaysia is hosting the second leg instead of the second-last leg as in previous years. The World 500cc Mootorcycle championships is also held at Sepang. MAHB said that while event management provided nearly 110 million ringgit in turnover, it made a pre-tax loss of 23 million ringgit. In its recent statement to the stock exchange, MAHB said that due to the increasing cost of organizing the event, the group intends to seek the support of the Government in order to continue organizing these events. When MAHB signed the deal to host the F1, the exchange rate was US$1 to 2.50 ringgit. Following the regional financial crisis in late 1997, the economies of East Asia went into a tailspin leading to severe recessions. In October 1998, Malaysia imposed capital controls on the outflow of funds and pegged the ringgit at 3.80 ringgit to US$1. Whatever it is, MAHB is equally anxious about the bottom line of organizing the F1 while race fans just want to see which driver will cross the checkered flag first. - Asiafeatures.com |
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