Formula 1 is a world where people tend not to think of the real world outside – particularly the journalists. Teams will tell you that it is virtually impossible to raise sponsorship money at the moment, but that is an inconvenient fact and tends to be ignored. Of course, it is logical for Virgin to enter F1. Of course Renault will be able to find a replacement for ING?
And if all else fails there is also the Middle East. Money comes out of the ground over there, or so they say…
Well, chew on this. Abu Dhabi sits on top of nearly 10% of the world’s oil reserves and has almost $1 trillion invested in companies around the world. It is reckoned that each of the 420,000 Abu Dhabi citizens is worth $17m – at least on paper. It is the world’s richest country – and therefore a good place for Formula 1 to be in the future.
The government is very keen that everything goes according to plan this year and that the circuit under construction on Yas Island is ready in time for the inaugural Abu Dhabi Grand Prix on November 1. Yet, even in Abu Dhabi, the recession is causing trouble. The company building the Yas Island circuit, Aldar Properties, recently recorded an 84.9% fall in fourth-quarter profits to $21.78m. The company’s shares, which were trading at a high of $3.60 in August, are now trading at around 50 cents.
Aldar says that it will go ahead with the projects it has already committed to, but will review those that are currently in the design stages. It also says it is switching away from high-priced property and concentrating more in the mid-range market.
This is sensible given that Abu Dhabi property prices are down 20% since last summer.
There are rumours in the Middle East that the Ferrari theme park, which is to be built next to the F1 circuit, has been delayed until 2010. This is not entirely surprising given that an estimated $582bn worth of construction has been put on hold in the UAE in the last few months.
“All of the Yas Island Phase 1 will be finished this summer, with obviously the Formula 1 Grand Prix circuit, the infrastructure, seven hotels, a major marina, the yacht club and a golf course,” said Aldar chief executive John Bullough recently.
Good news.
