F1 in Reverse: Drop India/Korea, Add Austria/Russia

Sochi Grand Prix come October: welcome to irredentist F1.

There has been a drive in Formula One to broaden its audience to the developing world. In recent years, the likes of Bahrain, China, India, Malaysia, Turkey, and the United Arab Emirates have been added to the F1 calendar along with Singapore and South Korea. While Brazil remains a long-term fixture, others that have hosted FIA-sanctioned events include Mexico, Morocco and South Africa. Given prevailing demographic trends (populations are still increasing in the developing world) and economic trends (the world's center of economic activity is shifting eastward) you'd expect more races to be held in emerging markets, but not so.

Looking at the 2014 F1 calendar, I thus found it weird that India and South Korea have been dropped simultaneously. Sure F1 honcho Bernie Ecclestone is rather mercurial about scheduling, but still. While India is of course the mother of all growth markets with a population of 1.1 billion-something people, the beef F1 has with it hosting a race has been the traditional Indian "license raj" vice. That is, incomplete reform makes it very hard for foreigners to come and go with ease such as F1 with its platoons of equipment and personnel. [Cue fat customs fees and import taxes.] The outgoing Indian Prime Minister Manmohan Singh has been faulted for pandering to special interests in not opening up the economy. As it turns out, lack of liberalization is also to blame for the F1 circus departing (at least this year):

[F1 impresario Bernie Ecclestone] said the Indian GP promoters have not fully complied with the race contract to put the 2015 race in jeopardy. It now seems that the tax and bureaucratic hurdles cited for the uncertainty over the race returning to the Buddh International Circuit (BIC) were not the only reasons.

Ecclestone's revelation comes days after he said that he wants the race to be pushed to 2016 so that the country "gradually gets over all the bureaucratic and the tax issues to improve the general financial conditions". His statement fuelled speculation whether the race will ever see through the remaining two races of the contract.

Quite frankly, F1 does not particularly care about governance--unless it is being hamstrung by limits on bringing in people and equipment necessary to make the greatest racing show on Earth possible. In this respect, India's inability to accommodate F1 is symptomatic of broader difficulties with liberalization.

After four years of races in South Korea's Yeongam circuit, we must also bid it goodbye. Unlike the Japanese, the Koreans did not take to F1 as attendance was poor and the track was not particularly well-liked by the drivers and teams. So, away it goes:

The poorly-attended Korean race, one of the least popular among Formula One's travelling fraternity, has sustained heavy losses. Organisers, whose race at Yeongam in the far south was due to be moved from Octoberto April, had sought a contract re-negotiation with Ecclestone. 

Now, to the races added to the calendar replacing India and Korea. You must be joking if you consider Austria a "growth market" with its relatively small and not exactly booming population. Money talks, however, and Red Bull--winners of the last four constructors and drivers championships--brought the race back after over a decade in abeyance:

The Austrian Grand Prix is set to return to the Formula 1 calendar in 2014, after Spielberg's owner Red Bull revealed a deal had been struck for a July 6 date. The energy drinks company issued a short statement to Austrian media outlets on Tuesday morning saying that it had concluded negotiations for F1 to return to the circuit.

The former A1 Ring has been renamed--wait for it--the Red Bull Ring. The more things change, the more things stay the same as money talks more than anything else in this most commercially oriented of sports. Lastly, the appearance of Russia on the calendar will do nothing to dispel accusations that F1 favors authoritarian regimes--especially after its extracurricular activities in Ukraine after the Sochi Olympics. Speaking of which, we are beating a path back to Sochi for the race. It turns out Bernie is quite the Putin admirer...

Who do you ask for help if you need to turn a muddy hole in the ground into a futuristic grand prix track? "He's my sort of man," Formula One supremo Bernie Ecclestone says of Russian president Vladimir Putin's influence in the project to stage the nation's first grand prix this October in Sochi.

"He knows what he wants to do and he gets on and does it. I've never had any fear that what he agreed to do wouldn't happen. I think (Russia has) done a first-class job for F1 and a super job for the Olympics," Ecclestone told CNN. It's the kind of ringing endorsement that stands out like an oasis in a desert for a politician much derided for many of his policies by a large swathe of the international community.

But then, the 83-year-old Ecclestone has a reputation for favoring those who he believes can deliver on their promises and thereby aid F1's further expansion. The growth of motorsport's elite division into one of the world's most valuable sport franchises has been built on such relationships and Ecclestone's shrewd 40-year management of them.

So yes, Russia is an emerging market, but no, there is nothing quite so novel about it, really. There is some debate about whether Russia has really arrested its demographic decline, but you have to wonder if there really is an emergent consumerist "middle class" there as opposed to a bunch of state-sponsored oligarchs and everyone else with not much of any spending power. Putin's money talks, but what if the average Russian isn't well off enough to buy ludicrously overpriced F1 paraphernalia? 

Let's just say Russia's place in the F1 calendar is not secure--just as so many other developing countries that have been added and dropped now understand since Bernie's clearly a "what have you done for me lately" sort of chap. The show must go on.