F1: Sharing the $1bn in value add with the losers?

Singaporeans must accept F1 race as necessary event: MTI (The Trade and Industry Ministry says the community must accept the Singapore Formula One race as a necessary event in Singapore. This is because the race has reaped benefits such as enhancing Singapore’s image and bringing in more tourism receipts.)

And

Teo Ser Luck: Singaporeans must accept F1 as a necessary event

So how abt sharing the benefits with the losers?  Especially since F1 will bring S$1b “additional value-add” for economy, says Iswaran. (S’pore expects expenses to drop about 15% to 20%, according to the Ministry of Trade and Industry. The cost of the race is about $150 million, with the government co-funding 6o% of the amount, reminded S. Iswaran, “Singapore’s second trade minister, who’s responsible for developing the tourism industry”. What he didn’t say is that hotels have to pay a special levy of 30% on room rates during F1 period, if they are “track-side” hotels and 20% for the others. )

Compensate the retailers at Suntec City  and those who work in the city? Tax rebates for them? If no such sharing of the benefits, then it’s some private profits, and big state windfall (via taxes and other levies), and public inconvenience and some private losses. Readers might also like to know that it costs at least US$120m to build a dedicated F1 circuit (excluding, it seems, land costs), so by inconveniencing commuters and some retailers, the government is passing on the one-off cost of building a F1 track to some S’poreans annually. Whoever said there isn’t a free lunch? More reason to offer compensation.  

BTW, before the race, our constructive, nation-building media gave the impression that a deal-breaker was S’pore’s demand that it be charged a nominal fee for the race (Monaco pays nothing because until S’pore’s F1, it was the only F1 race on public roads.) Well it seems, S’pore was told to f***off and it got buggered: “Ecclestone refused to confirm the cost of the new contract, although he did hint that negotiators for the Singapore race had failed to extract a Monaco-style race fee exemption. It is thought that they argued for one, pointing out how successful the race has been for sponsors. http://www.telegraph.co.uk/sport/motorsport/formulaone/9560875/Singapore-Grand-Prix-secures-its-place-on-F1-circuit-after-organisers-agree-a-new-five-year-contract.html

Mr Iswaran only said there has been “a discount in franchise fees for the new contract”: whatever happened to the deal-breaker? The silence from our media on the issue is deafening.

Seems that Bernie said that the Thais willing to stage a F1 night race in Bangkok if he pulled out of S’pore.

Related post: http://atans1.wordpress.com/2011/09/25/is-f1-worth-it-updated-with-2011-estimate-of-additional-tourism-revenue/ BTW not seen any details of estimated 2012 revenues despite all the talk of benefits.

STB & MDA missed a trick here

One of the reasons given for the staging of the Kiddie Games (Youth Olympic Games) and the annual inconvenience that is F1, is that it promotes S’pore as a place to visit; even if it costs the taxpayer serious money. F1 loses money for us. No wonder, S’pore is still trying to get the fees lowered if it agrees to stage race permanently. Minister’s comments last yr and earlier this yr, the govmin denied it had agreed terms.

Well if promotion is what we are after, how come the various govmin agencies and in particular the STB and the Media Development Authority division that promotes films missed getting “Supercapitalist” made here. A just released independent movie, “Supercapitalist”, has HK as a backdrop.  It opened last “Friday in New York, and later in Washington, San Francisco and Los Angeles, and is also available on video on demand on cable and on iTunes,” reports NYT’s DealBook.

Or they didn’t even know this movie was being made? Or they knew, but tot the subsidies it would need to come here were “peanuts” to the subsidies shelled out for the Kiddie Games and F1. Or see unknown producers and directors no ak?

 

“F” word banned by PUB?

Trust a former President’s Scholar to come up with the solution to prevent floods in Singapore. VivianB got PUB to rename “flooding” as ”ponding”. Why didn’t Yaacob do this instead of calling a flood a 50-yr event. Well there were two 50-year events in less than two months last year.

Seriously, I don’t think it was VivianB’s idea. Likely to be the new CEO of PUB that is behind the renaming. He after all blames us for the floods, saying S’poreans took things for granted*. I say to him, “Don’t try to deflect blame like SMRT’s CEO who told us to guard the trains when there was a security break-in. PUB did not do it’s job.

Ain’t this renaming juz daft and misleading? PUB said of the heavy rain last Friday ”there was no flooding at Orchard Road … However, water ponded at the open area of Liat Towers, the underpass between Lucky Plaza and Ngee Ann City, and the basement of Lucky Plaza due to the sustained heavy downpour”.

Sorry PUB, these places were flooded. The ponds were at least ankle deep, at Starbucks, customers walked on chairs to get out, and shops had to close**.

I’m glad that MediaCorp didn’t buy into this euphemism. They called these “flash floods”, as they used to. As to ST, they tried to be truthful, while keeping VivianB and PUB onside. No wonder SPH is such a good dividend payer, while unlisted MediaCorp continues to struggle financially.

If VivianB and PUB were doing their very best to ensure that tourists are not scared off (Remember that the retail trade is tourist dependent to keep profitable and that the overall economy is heading for a slowdown, if not a recession), they failed as far as Malaysia is concerned.  Bernama reported:

Flash Floods In Several Parts Of Singapore Including Orchard Road

Flash floods hits several areas of Singapore including the republic’s most famous shopping alley, Orchard Road, following prolonged heavy rain in the southern and central parts of the city state Friday …

Nice try guys. But better for the economy, retailers and S’pore’s image if the PUB improved its “ponding” prevention measures, not try to play word games.

—-

*”But maybe we have also become victims of own success. Because we have been so successful, alleviating floods, that we have not seen a flood situation for a long time. So when it came, it did catch Singaporeans by surprise.”  Channel News Asia

**How Today reported the situation

The underpass between Lucky Plaza and Ngee Ann City remained closed yesterday evening. Some shop owners at the ground floor of Lucky Plaza said that water levels were ankle-high, but the situation this time was better than during previous floods.

At retail store Giordano, store in-charge Lyn Molino estimated losses of up to S$7,000 and said that customers were not only deterred by the wet floors but also by the stench from yesterday’s floodwaters. “This is supposed to be a good opportunity for us to have extra earnings but it has all been affected,” she said.

The floodwaters also washed out business at Starbucks and fast-food restaurant Wendy’s, among other establishments, at Liat Towers. Wendy’s manager (marketing and branding) Seng Woon Fa estimated losses of about 60 per cent of the day’s earnings. “We are now just busy cleaning up and hope to resume business as soon as possible … we are still checking if any equipment is spoiled,” he said.

F1: Does the government know?

Earlier this year News Corporation, a media group, and Exor, the family investment firm of the Agnelli family, which also owns Ferrari, announced their interest in making a joint bid for Formula One. (News Corp is no longer interested given its problems in the UK.)

They briefed that the sport was losing its ground. Viewership is falling, though the business rakes in ever-growing piles of cash from doing deals with governments to host Grand Prix races. Mr Ecclestone (the current supremo) has no successor trained to take on the difficult task of balancing the competing needs of teams, sponsors, broadcasters and circuits.

If viewership is falling, and if there are succession problems, waz the point of staging rsace, unless the cost of staging one comes down?

F1: S’pore will not rush into contract decision: Iswaran

Mr Iswaran, junior trade minister said: “We have engaged independent consultants, because we want to make sure that going forward, we have a clear idea of what is the value proposition of the F1 for Singapore…from the tourism point of view, from an economic spin-off point of view and a social point of view.

‘My own sense is that we need to have some kind of closure on this, certainly before next year’s race. But I’m hoping we can find a mutually beneficial agreement sooner rather than later.”

This was only reported in ST Online. ST carried an article on its front page praising the economics and other aspects of the race. Headline read,  ”Stunning S’pore race a big winner” .

Is F1 worth it? Updated with 2011 estimate of additional tourism revenue

Year	Cost (SGD M)	Additional TourismRevenue(SGD M)	Profit/ Loss(SGD M)	Margin over Costs (%)
2008	150	168	18	12
2009	150	93	-57	-38
2010	150	160	10	6.67
2011	150	100 (Estimate)	-50	- 33.33

Totals                      600                     521                      -79                             -52.67

(Click the headline to see full table if you are reading from the Home page.)

Doesn’t look gd does it? Looks bad if you ask me. Revenue (estimated albeit) drastically down this year.

[Update on 26 September 2011 7.15am: ST headline "Stunning S'pore race a big winner" and reporting that "race has retained its lustre and won over new fans", is at variance with the estimated drop in revenue (see table) that SunT reported yesterday.]

Note: As much as 60% of the S$150m a year is being invested by the Singapore government through the Singapore Tourism Board (STB) in a bid to attract more visitors here,

Any wonder why “intangible rewards” matter. http://www.bbc.co.uk/news/business-15015158 

But shouldn’t intagible costs be taken into consideration, which makes things worse. Danny the SDP Bear’s pals may not be wrong.

(Cost and revenue numbers taken from BBC link above, except for 2011 revenue, taken from ST. Note ST quotes a revenue figure of S$98m for 2009.)

Is F1 worth it?

Year	Cost (SGD M)	Additional TourismRevenue(SGD M)	Profit/ Loss(SGD M)	Margin over Costs (%)
2008	150	168	18	12
2009	150	93	-57	-38.00%
2010	150	160	10	6.67
Totals	450	421	-29	-19.33

(Click the headline to see full table if you are reading from the Home page.) (Cost and revenue numbers taken from BBC link below.) 

Note: As much as 60% of the S$150m a year is being invested by the Singapore government through the Singapore Tourism Board (STB) in a bid to attract more visitors here,

Any wonder why “intangible rewards” matter. http://www.bbc.co.uk/news/business-15015158 

But shouldn’t intagible costs be taken into consideration.