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Middle East fuels Formula One's expansion

  • Story Highlights
  • Countries invest billions to join Formula One and attract teams for testing
  • Middle East leads spending spree with new tracks and themed developments
  • Traditional grand prix hosts face uncertain future with expansion elsewhere
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By Glen Scanlon
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LONDON, England (CNN) -- The money involved is mind boggling, even by Formula One's heady standards.


Bahraini Crown Prince Salman Bin Hamad al-Khalifa, left, with grand prix winner Felipe Massa.

Across the Middle East, Asia and Russia the race is on to join motor sport's most exclusive club: grand prix host.

Driven by F1 supremo Bernie Ecclestone's desire to push into new markets -- primarily in Asia and the Middle East -- the sport is witnessing a boom in track construction and investment.

The competition to win a race has traditional hosts like Britain's Silverstone battling to raise the estimated $50 million it needs to improve facilities before its contract runs out in 2009.

Elsewhere, Melbourne also nervously awaits news of its future as money is poured into developing the sport and tracks in India, South Korea, Abu Dhabi, Qatar, Russia and Saudi Arabia.

Ecclestone has been orchestrating his growth plans in recent years, saying he wants at least 20 races a season and less time spent on testing.

He has bemoaned the conditions at Silverstone and said Melbourne "needs to be a night race" to attract European television audiences, while simultaneously courting new markets.

The pressure has been kept up with the addition of grands prix in Valencia and Singapore this season and the signing of agreements with Abu Dhabi to host races beginning in October 2009, and India and South Korea the following year.

In addition, Qatar and Russia have indicated their strong interest; money always speaks louder than traditional ties in such situations.

The greatest spending spree has been in the Middle East, where an estimated $11.3 billion has been spent on motor sports in the past five years.

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Mubadala Development, an Adu Dhabi company, owns five percent of the Ferrari team, while the government-owned Bahrain Mumtalakat Holding acquired a 30 percent stake in McLaren last year.

More substantially, racetracks have been built in Abu Dhabi, Dubai, Qatar and Saudi Arabia, with new racing series (the Lumina, A1, Speedcar and GP2) added.

A Ferrari theme park is being built in Abu Dhabi and work has started in Dubai on Motorcity, a $2.5 billion development planned to include 3,600 apartments, 800 luxury villas, a business area with workshops and showrooms, three hotels and a F1 theme park.

Qatar, meanwhile, last month promised a "massive upgrade" of its Losail MotoGP track so it could host F1 races in the future and attract teams for testing.

While it might appear the Middle Eastern states are stepping each other's toes, they believe the developments are complementary.

Shaikh Mohammed bin Isa Al Khalifa, a key figure behind F1's development in Bahrain, said at the Motor Sport Business Forum held in the country earlier this month that it had benefited from the exposure generated by hosting a grand prix.

However, it was not just about Bahrain.

"We are continuing to look for new opportunities and new ways to help and grow the industry in the region and Bahrain."

He said nearly half the region's population was under the age of 25, so the demographic was "very favorable to motor sport."

"We need to capitalize on the opportunities this growing population provides us."

Indeed, the opportunities appear large. A report recently found that the grand prix was worth $548m to Bahrain, with the economic benefit soaring 46 percent in 2007 compared to the previous year.

Martin Whitaker, Bahrain International Circuit's CEO, agreed.

"It's about demonstrating not that Bahrain is bigger than Abu Dhabi or Qatar or Kuwait, but that we're all working together to improve the business opportunities that come on the back of being involved in motor sport."

Whitaker, also speaking at the forum, said there was a danger tracks like Silverstone would get left behind.

"We are very lucky in the sense that we have government support behind us to make it work. Nevertheless, it doesn't mean we don't work at it on a daily basis.

"We are lucky because we were able to build this circuit five years ago and embed all the technology."

Ben Kirkland, a senior consultant with KHP Consulting and who helped organize the forum, said Formula One could have a "massive impact" on a country's image.

Kirkland said it attracted billions of viewers and was held every year, unlike events like the Football World Cup.

"Bahrain is a fantastic shop window for what a country can do [with F1]."

He described the facilities in Bahrain as "amazing" and believed Formula One was a good fit for countries in the Middle East, with its emphasis on technology and development. Governments, businesses and individuals in the region were clamoring to get involved.

Kirkland said Formula One was a "large pie" and there was more to the sport than hosting a grand prix, as Union Properties was proving with its MotorCity development in Dubai.

He said F1's expansion was being driven by corporate interest.

"China was of massive interest [to corporates], so F1 goes there."

Kirkland said another thing in the Middle East's favor was that races could be watched live in Europe mid Sunday morning.

He said it was possible another $11 billion could be spent on motor sport in the region in next five years.


"Saudi Arabia have a new circuit in Riyadh and a number of other projects are being developed.

"The development will keep on growing as the demand is there at the moment." E-mail to a friend E-mail to a friend

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