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Friday May 22, 2009

Credit crunch weighs on Monaco GP

MONACO: Indian magnate Vijay Mallya refuses to let the global credit crunch cramp his style, even if other high rollers may be keeping a lower profile at this weekend’s Monaco Grand Prix.

The aviation, beer and liquor tycoon, who also owns the Force India Formula One team, has his 95m yacht Indian Empress moored in the Mediterranean principality’s harbour and is preparing to party.

“I think glamour and sport go hand-in-hand and it’s no more obvious than in Monaco,” said the self-styled “King of Good Times,” whose personal wealth has suffered in the downturn to the extent that Forbes magazine listed him in March as one of the world’s 355 ex-billionaires.

“Monaco is a race that is so famous worldwide that almost everybody knows it and wants to come to it, so it is not only important from a team point of view but from a sponsors’ point of view as well,” he added.

“We will be hosting two parties again, as brand awareness is even more important in these days of economic downturn.

“The days of unlimited budgets are of course gone, and clearly one has to watch that the end justifies the means, but we still believe that these events give ‘bang for buck’ and are an integral part of why we are involved in F1 as a project.”

Monaco’s Prince Albert and the usual cast of international rich and famous will turn out at an exclusive charity auction and fashion show today to benefit the Elton John AIDS foundation. Others, though, have become more reluctant to flaunt their wealth in a recession.

Some of the bankers have disappeared while chief executives, as well as the major carmakers who dominate the billion-dollar sport, are wary of being seen to be living it up while shareholders and employees feel the pain.

“I think everywhere people think it’s the wrong thing to do to spend money,” Formula One’s commercial supremo Bernie Ecclestone said when asked whether he expected Monaco to be different this year.

“That’s how it is. People who have got money, who could spend it as they would have done in the past, are still not spending. That’s the problem.”

Credit Suisse have left BMW-Sauber while ING are saying farewell to former champions Renault at the end of the year and have already pared back their spending.

Williams’ backers Royal Bank of Scotland (RBS) have become majority owned by the British taxpayer, putting an end to the sort of hospitality budgets that would attract unwelcome headlines nowadays.

Retired triple world champion and RBS “global ambassador” Jackie Stewart revealed recently that his Monaco hotel suite had cost 53,000 euros for a five-night stay last year.

The Scot will be absent for the first time since the 1960s but feels Monaco needs to be taken in context.

“I don’t see it as a jolly. Monaco in fact is hard work if you are going there for a good business reason.

The arrival of Singapore last season, and Abu Dhabi this year, has also given Formula One sponsors and business jet-setters two new glamorous alternatives.

“In our case I would say that we have significantly fewer guests coming to Monaco,” Toyota motorsport president John Howett told Reuters. “The only one where we have strong appeal is the new one in Abu Dhabi.”

Swiss-based diamond company Steinmetz have their gems on the McLaren drivers’ helmets but are otherwise being lower key. — Reuters

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