Will the 2020 Singapore F1 Night Race be Cancelled? Should it be postponed?
With mounting death toll and fears of a second wave of coronavirus outbreaks, LUXUO studies the economic and social impact of going ahead with the famed Formula One Night Race
Globally, with confirmed cases of Covid-19 exceeding 1 million and more countries resorting to lockdown measures to slow the growing pandemic, the International Olympic Committee (IOC) and Tokyo Games organisers were under immense pressure to postpone the 2020 Summer Olympic Games even as the IOC and Japanese authorities insisted that the games would go ahead as planned.
Finally, they caved. Japanese Prime Minister Shinzo Abe announced that the 2020 Summer Olympic Games, originally scheduled to begin in Tokyo on July 24th would be rescheduled to 2021. But Abe’s reticence and reluctance to cancel was well understood: organisers estimated the total cost of the Games at around $12.6 billion. Japanese businesses have spent a record $3.3 billion on sponsorships, not including the partnerships signed between major companies like Toyota, Bridgestone and Panasonic and the International Olympic Committee for rights to sponsor the Games. Which begs another question: will the Singapore F1 Night Race, a high profile leg of the Formula One Season be postponed as well?
Will the 2020 Singapore F1 Night Race be Cancelled?
On 19th March, Monaco cancelled its showcase Formula One Grand Prix, another high-profile casualty of the coronavirus epidemic. Scheduled for earlier in May, the Monaco leg of the F1 grand prix is easily the season’s most famous and glamorous, but uncertainty about the teams’ participation and access, with neighbouring France and Italy in lockdown, made the situation ‘untenable’, said the Automobile Club de Monaco (ACM).
“Under no circumstances will it be possible to organise these events later this year,” – ACM.
2020’s first eight Formula One races have already been postponed or cancelled, with status of the 14 June Canadian Grand Prix, considered by many to be the de facto season opener, in doubt. Like the Tokyo Summer Olympics, the costs of hosting the Formula One Grand Prix are astronomical, further complicated by the requirements of its corporate sponsors.
According to the organisers, the global television audience of the F1 Grand Prix grew 9% to 1.922 billion during the 2019 season, the highest for Formula One since 2012, representing a third consecutive year of growth. Officially, there is no publicised rate card for the Grand Prix but even with fees as closely guarded as they are, a broad range of independent sources including official government filings from countries which co-fund the races in their cities are available. Christian Sylt, a contributor of Forbes SportsMoney, compiled the figures and discovered that over the ten year race duration the hosting fees total an estimated $396.2 million with the costs of running the race coming to $575 million, bringing the overall expense close to a billion dollars. With so much at stake, it’s easy to see why stakeholders in either Olympics or Formula One fixtures are hesitant to cancel or postpone something as high profile and arguably high returns event like the 2020 Singapore F1 Night Race.
Reasons why Singapore F1 is likely to be cancelled
“While full recovery this year (2020) is unlikely, partial recovery next year is probable. We must be ready to lead and ride the recovery when it happens,” – Transport Minister Khaw Boon Wan said in Parliament
In view of the steep decline in passenger traffic, and the likelihood that air travel demand will not return to pre-COVID-19 levels in the short term, it was announced that Singapore Changi Airport Terminal 2 will be closing for a period of 18 months.
Tourism and air travel will not have recovered yet
Changi Airport is Asia’s most connected international airport and internationally, it is considered the world’s number 8th in terms of transits and hence, can be taken as a bellwether indicator of overall air travel demand. Changi Airport Terminal 4, launched as a “budget terminal” for short intra-regional travel is also under consideration for suspended operations as the remaining airlines reduce flight schedules.
It is telling that on the same day, Monday 6 April, Abe announced a state of emergency as the sudden surge of coronavirus infections in the Japanese capital led to mounting fears of rapid spread in the world’s biggest city. The number of people newly infected with COVID-19 rose by 205 on the first day of the week, which typically sees fewer cases due to less testing over the weekend, prompting the Tokyo Medical Association to declare a state of medical emergency over concerns of overwhelming patients.
Community spread is still an issue
“We are not even at the apex yet.” – New York state governor Cuomo on the death toll
According to Al Jazeera, France and Italy have recorded their lowest death toll from the coronavirus in weeks: France recorded 357 deaths, lowest daily increase in a week; while Italy reported 525 deaths, the lowest in more than two weeks; Spanish deaths too fell for the fourth consecutive day with 637 deaths prompting hopes that the country had passed the outbreak’s peak but its really too early to tell as even as some countries registers falls, the United States continues to reel with 630 deaths in New York state alone, with State Governor Cuomo saying that, “We are not even at the apex yet.”Indeed, the rise and ebb of coronavirus cases is a major concern in today’s highly globalised world. In fact, even as China boasted of its “successful containment” of the coronavirus outbreak, state authorities did not act like covid-19 had been successfully contained – Cinemas in some parts of the country were reopened on March 20, but it was short-lived as China Film Administration issued notices on Thursday 28th March to close Shanghai cinemas once again to prevent a second wave of Coivd-19 cases, after locally transmitted infection was reported in neighbouring Zhejiang.
Dangers of the Second Wave of Covid-19
As Covid-19 cases dropped to practically zero in Hubei, the province where the coronavirus first emerged, authorities lifted travel restrictions in and out of the province late March, 60 days after the CCP government took decisive action to lockdown the region. However, China’s National Health Commission reported a further 78 asymptomatic cases of COVID-19 on Sunday 5th April; of the latest figures, 38 cases were imported, but one was transmitted locally in Guangdong province by someone who travelled from Hubei province.
“China is not near the end, but has entered a new stage. With the global epidemic raging, China has not reached the end,” – Zeng Guang, chief epidemiologist with the Chinese Center for Disease Control and Prevention
Also consider that this war on the coronavirus is not a local one but a global war even as China lifts travel restrictions, at least 1.4 million Chinese students are overseas, looking to return home as Chinese authorities try to prevent a wave of new infections from abroad and within. This scenario was itself best demonstrated when Singapore, long held as an exemplary model for containment itself went into a lockdown as returning citizens were allowed into the population without testing and the surge of community spread forced the ruling party into “Circuit Breaker” measures, an intermediate step between the country’s DORSCON Orange status and Red, the highest of all Disease Outbreak Response System Conditions. As early as 20th March, the government had downplayed resorting to the “nuclear” lockdown option but on Friday 3 April, Prime Minister Lee Hsien Loong and his ministers addressed the country in an hour and a half long live telecast of the stay-at-home measures to be implemented, including the cessation of all non essential activity.
Widespread economic damage to personal finances
Even as China, reportedly the first country to “recover” from the pandemic, starts to resume economic activity. Its population isn’t so confident. According to Quartz, Chinese consumers are thinking twice about their post-coronavirus spending, a pervasive sentiment of pessimism amongst young professionals has dashed the Chinese government’s hopes that its citizens will take part in “revenge shopping” to re-boot the economy. If their citizens are scrimping on Starbucks, they aren’t about to splurge on big ticket items like travelling to Singapore. The island nation has China as one of its biggest trading partners and is a popular destination for Chinese tourists.
The Singapore F1 Night Race typically attracts close to 9,000 well-heeled attendees each year with premium hospitality tickets starting from S$3,000 for a three-day pass, while the high-end Paddock Club can cost S$10,000; with guests from the United Kingdom, Australia, China, Thailand, Hong Kong, Japan, Holland and Germany. It goes without saying that the United the Thai, Thailand and Germany are not faring particularly well at the moment.
UK Prime Minister Boris Johnson is himself in Intensive Care while the country endures 52,000 infections and 5,373 deaths, slightly more than 10% mortality rate with UK unemployment may now have soared to its highest in almost five years, after just under half a million applications for the universal credit benefit in just nine days.
Meanwhile, Thailand resorted to a a nationwide nighttime curfew from last Friday, in the latest measure to stop the spread of the coronavirus. According to Bloomberg, the economy was already under strain before the coronavirus began spreading and the tourism reliant economy, making up about a fifth of GDP, was further hit when international travel curbs began to take effect.
“The costs are likely to exceed anything Germany has experienced in recent decades as a result of economic crises or natural disasters,. The crisis will also cause massive upheaval on the job market. This could put the situation at the high point of the financial crisis into the shadows.” – Clemens Fuest Ifo’s president
Thomas Schaefer, the finance minister of Germany’s Hesse state, committed suicide after becoming “deeply worried” over how to cope with the economic fallout from the coronavirus, a report released by Germany’s influential Ifo think tank, calculated that the shutdown resulting from the coronavirus would cost the country between 7.25 and 20.6% of GDP, based on a range of estimates for one to three months lockdowns in length.
Competitive Nature of Formula One already pushing some teams to potentially criminal acts
According to AFP, Red Bull motorsport consultant Helmut Marko admitted that he wanted the team’s Formula One drivers to deliberately contract the coronavirus before the potential start of the new season. Marko told Austrian television channel ORF, “The idea was that we could organise a camp where we could mentally and physically fill this dead time, then of course it would’ve been ideal for the infection to come.”
— Felipe Massa (@MassaFelipe19) March 30, 2020
Some teams were already under significant pressure before the pandemic as they spent considerable resources to designing different cars to meet new 2021 Formula One technical guidelines while also developing their racing machines for 2020’s Formula One season. Racing teams like Red Bull resort to such desperate measures as they get much of their income from the sport’s overall revenues and sponsors, who are not currently getting any exposure as a result of the postponement of many of the Grand Prix races. The question of whether the 2020 Singapore F1 Night Race should be cancelled will ultimately become a decision fought between financial concerns and the potential costs in human lives.