Thread by @CashNSport

A Mzansi #F1 GP, What We Need To Bring It Home 🇿🇦🇿🇦🇿🇦

I took some time to understand and break down the requirements.

1- Getting to Grade 1 status
2- Almost $1 billion in fees
3- Viewers and the growing female support
4- The #DriveToSurvive effect

[THREAD]
#F1 #SportsBiz

https://twitter.com/CashNSport/status/1506978750776422402

To begin with, there must be a Grade 1 venue to host the race. This can come in the form of a permanent track like the one we have at Kyalami or a street circuit. In order to host a Grand Prix, tracks have to conform to FIA guidelines

Kyalami is a Grade 2 track

FIA guidelines regulations cover everything from track dimensions to the type of medicinal supplies stocked in the medical centre. Mandatory inspections must take place in order to ratify a track’s licence, the higher the grade required, the higher the fee the circuit must pay

Kyalami was built in 1961 and hosted 21 editions of the South African Formula 1 Grand Prix through to 1993 when the costs of another rebuild, necessitated by stricter track requirements, became too high to manage and the track lost its F1 status.

Since taking over, Toby Venter and his partners have invested over R100 million to make the venue suitable for F1 races and according to him, an SA GP is real possibility. The cost is far less than building a venue from scratch and even less than the cost for a street circuit.

A street circuit could cost up to R830 million ($57 million) to operate on an annual basis with costs such as $30 million for staffing and grandstands, $16 million for barriers, fencing and pit buildings as well as $1 million for insurance.

📸 Raconteur

What is much more of a problem is the hosting fees.

The cost of hosting a Formula One race depends on the duration of the contract signed. Most new venues will sign contracts up to ten years with the fee increasing to a maximum of $48 million in the final year

With fees reaching up to a billion dollars over a ten year period, it’s likely that government financial support will be needed.

An event that points to a Grand Prix being hosted here is the Kyalami 9 Hour which was endorsed and supported by the Gauteng local government

Taking the Kyalami 9 Hour which was endorsed and supported by the Gauteng local government as an example, one can see why they would get involved.

The economic impact of the event was huge with a rumoured 17000 employees, up to 200,000 spectators across the race weekend

It’s unknown how much financial support was provided by local government but it is said that the economic benefit to the immediate area in rooms booked, spending on entertainment and shopping as well as tourism was over R100 million.

GP local govt finances below ⬇️

In January, it was announced that the Singapore GP would be renewed for another seven years because of the massive economic benefit that city has seen as a result of Formula 1.

Organizers and the Singapore Tourism Board reportedly paid $35 million per Grand Prix

The race has been a massive success for Singapore, helping the country to generate more than $1.1 billion in tourism receipts and attract more than 550 000 international visitors since 2008

Whipe.its unlikely that government will have financial muscle to help, their support is needed in other areas such as restrictions on fan attendance.

Beyond the financial and policy matters above, we have to ensure that enough people are watching the event, both on television and at the circuit itself to justify the sponsorship revenue needed to keep F1 interested in a South African event

Data of live coverage of Formula 1 races on SuperSport is strong and has largely remained around the 600 000 unique audience mark since 2017. With only 18 races in 2018, the number of total unique viewers reached 415 000

Source: Nielsen Sports SA

Interestingly the global face of F1 viewership in 2021 changed and included a lot more female viewers. Nielsen estimates that there were 637,287 unique viewers of Formula 1 during the 2021 season with 40.6 of those being female and 26% of the total audience aged between 25 and 49

While the drivers themselves may not like the Kardashian like drama created by Drive To Survive, the increase in new fans cannot be ignored. The last six races of the season averaged 200,00 unique viewers with the action packed Abu Dhabi GP racking up 302,000 unique viewers