KUALA LUMPUR: Malaysia must use October’s hosting of the Bahrain Formula 1 Grand Prix as a springboard to revive the country’s sports industry, according to industry experts.
This follows the announcement by Formula One confirming that the Formula 1 Gulf Air Bahrain Grand Prix will be held at the Sepang International Circuit (SIC) from Oct 2 to 4.
The race has been moved to Malaysia following the recent escalation of tensions in the Middle East.
Prime Minister Datuk Seri Anwar Ibrahim announced that Malaysia would spend only RM16 million to upgrade the track ahead of the race. It is understood that Bahrain pays between US$40 million and US$45 million annually for the hosting rights.
Sports industry consultant Nur Jasni Mohamed said Malaysia must seize the opportunity to maximise the economic returns from hosting the race. Malaysia previously staged Formula 1 races at Sepang from 1999 to 2017.
In 2023, Nur Jasni argued that Malaysia often underutilised major sporting events by treating them as standalone competitions instead of integrating them with tourism, retail and entertainment activities.
He said a whole-of-government approach involving the tourism, trade and other ministries could help maximise visitor spending and strengthen returns on investment from hosting international events.
Speaking to Twentytwo13, Nur Jasni said: “I mentioned before that we must craft a nation branding strategy – one that extends beyond sport to encompass broader national objectives.
“It must have a dedicated nation branding budget, with the Prime Minister’s Department leading a cross-ministerial effort. Only then will we see the benefits.
“If you ask the Youth and Sports Ministry to lead it, it will look only at the sporting angle – does this help us create a world champion? Similarly, other ministries will look at how it benefits only their own agenda.”
He added that many focus on the direct impact of hosting an event without evaluating its wider economic benefits.
The economic opportunity highlighted by Nur Jasni is already reflected in national statistics.
Last year, the Department of Statistics Malaysia (DOSM) reported that the country’s sports industry has become an increasingly important contributor to the economy, generating RM49.5 billion in output and RM19.6 billion in gross value added in 2022.
The sector employed 194,400 people, or 1.3 per cent of the national workforce, while exports of sports-related goods reached RM11.5 billion, resulting in a RM5.4 billion trade surplus.
Then chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the industry’s potential extends well beyond hosting sporting events, encompassing sports services, manufacturing, infrastructure, tourism and retail.
He said major sporting events create spillover effects across hospitality, food and beverage, shopping and other sectors, while growing participation in sports such as running has also fuelled demand for equipment, apparel and related services.
Mohd Uzir said making these economic statistics available would help policymakers and industry leaders identify opportunities to further expand the sector.
Former National Sports Industry Secretariat head Mustaza Ahmad said hosting the Bahrain Formula 1 race in Sepang presents an opportunity to put those ideas into practice.
Mustaza stepped down from his post two years ago after submitting a comprehensive report on the use of the Sports Satellite Account (SSA).
The SSA is intended to serve as a comprehensive statistical framework to assess the value of the sports industry and its contribution to Malaysia’s gross domestic product (GDP).
“I understand the Cabinet has approved it (SSA), but I don’t see it being utilised,” said Mustaza.
“The SSA helps evaluate the benefits of hosting major events and why Malaysia should be at the forefront of bidding for major sporting competitions.
“Malaysia should take full advantage of the F1 race by involving stakeholders across hospitality, transportation, medicine, event management, media, souvenirs, tourism, security, food and beverage, among others.
“We must reintroduce the Sepang circuit as a potential F1 venue and conduct an impact study on how the October race will benefit the nation.”
He added that the country should include the promotion of international sporting events in its national sports blueprint.
“Malaysia hosting the Bahrain Formula 1 race this October gives it all the benefits at a fraction of the cost.”
