What has Formula 1 given Azerbaijan?

Baku/28.04.23/Turan: The Formula 1 Grand Prix of Azerbaijan starts today. The “Formula 1” and “Formula 21” Azerbaijan Grand Prix will be held on April 28-30. This year, iron bars and concrete fences were installed on the central streets of the city, separating pedestrians from the road. Traffic is restricted on the main roads where the competitions will be held. Although people are dissatisfied with  conducting races in society, the government claims that “Formula 1” is important for the state. The operating company of the Baku City Ring has not announced the amount of funds allocated for this year's competitions.

Azerbaijan signed an agreement to hold the “Formula 1” Grand Prix in Baku in 2016. The deadline for the competition, which is due to end in 2020, has been extended for another 3 years. And this year, a letter was sent to the organizers with a request to extend the competition. The response of the organizing committee has not yet been made public.

What is the significance of “Formula 1” for the state? What have these competitions given Azerbaijan over the years? Has it done any good? Why is the discontent of residents not  considered?

Economist Natig Jafarli answers these and other questions in the "Difficult Question" program.

According to him, “Formula 1” has a lot of fans. "The number of fans of “Formula 1” is so great that it is in second place after football in this indicator. Its worldwide audience is 500-700 million people.

The main income of “Formula 1” is brought by broadcasts of races and advertisements. “Formula 1” has an organizing company that owns the rights to broadcast the competition. The host country is responsible only for solving organizational issues, and using the races to advertise itself, attracts tourists and investments," the expert explained.

He noted that since 2016, when the stage of the World Circuit Racing Championship was held in Azerbaijan for the first time, the costs were quite high.

"In the first year, the cost of purchasing the necessary equipment for the competition, organizing events, advertising, etc. amounted to about $ 200 million. In subsequent years, the costs were significantly reduced, since there was no need to purchase equipment anymore, they amounted to about $80 million annually," Jafarli said.

According to the calculations of the economist, the total income of the country for the entire time of the Azerbaijan Grand Prix races amounted to approximately $ 500 million.

"Thus, the country reached "0", equalizing costs and revenues. However, “Formula 1” brings indirect profit. Through Formula 1, countries and cities position themselves, improve their image, advertise themselves, attract tourists, investments," says Jafarli.