By Les Tan

Singapore Grand Prix

Will Singapore still see the Ferarri F1 cars from 2010 onwards? (Photo © Vanessa Lim/Red Sports file photo)

After all the posturing, eight teams have finally decided to pull out of the Formula 1 and set up their own series, reported the New York Times (Formula One in Turmoil as 8 Teams Break Away; June 19).

Ferarri, Brawn, McLaren, Renault, Toyota, BMW Sauber, Red Bull Racing and Toro Rosso are the eight teams that announced they are launching a new series for 2010.

What does it mean for Singapore?

It just means that the staggeringly expensive fee we paid to F1 to bring it to Singapore for five years starting in 2008 now looks unimaginable.

Singapore is estimated to be paying a fee of S$52 million per race and one Singapore GP costs S$150 million, with the Singapore government footing 60% or $90 million. Singapore is contracted to hold four more races.

The first Singapore GP last year was a mixed experience. The race had the unintended effect of negatively affecting business in the downtown area as pragmatic Singaporeans avoided the Marina area like the plague to avoid the traffic gridlock. A long lockdown period before the start of the race was a main factor.

However, 100,000 spectators watched the race over a weekend in September 2008, with 50% of them tourists, giving the Singapore economy a nice boost.

This year, with the worst global recession in living memory and falling number of tourist arrivals, Singapore will do well to again attract that number. Hotels are also reportedly more sobre in their assessment of room rates they can command, according to the Straits Times (Shifting gears to woo F1 fans; June 8, 2009).

Without Ferrari and marquee drivers like Lewis Hamilton, Jenson Button and Fernando Alonso, the F1 will suffer a reduced profile.

Will Singapore get a discount on the fee we paid or are we locked in?

Are we in danger of paying for a Ferrari but getting only a Volkswagen?