Azerbaijan can continue hosting “Formula 1” races for several more years

Azerbaijan can continue hosting “Formula 1” races for several more years. These competitions have been held in Baku since 2016. Although, according to the current agreement with the organizer, Baku should host these competitions in 2023 for the last time. However, last week, Turab Teymurov, a spokesman for the Baku City Ring operating company, said that negotiations were underway to extend the contract for the “Formula 1” Azerbaijan Grand Prix.

This year, these competitions will be held in Baku at the end of April (April 28-30). Since the end of March, reinforced concrete fences have been installed in the city center, and concrete blocks on roads have been installed since last week. The possibility that the race will continue in the coming years against the background of the closure of a certain section of central roads has caused criticism on social networks. The organizers   have not responded to this criticism yet.

According to official data, the cost of tickets for “Formula 1” ranges from 40-870 manats. It is said that most of the tickets have already been sold out, and this year ticket sales have reached record levels. Most of the tickets were purchased in Azerbaijan, Great Britain, and the Netherlands.

According to official data, at the time of the competition in 2022, about 10 thousand tourists from 70 countries visited the country.

The Baku City Ring operating company also informed Turan that this year the interest of both local and foreign fans in the Azerbaijani Grand Prix has increased, and tickets have been sold to fans from almost 100 countries.

According to the organization, holding these competitions in Azerbaijan has many advantages: "The first four competitions held in Baku brought a total of $506.3 million to the country's economy. According to the results of an independent study conducted by the international auditing company PricewaterhouseCoopers (PwC), this total amount includes direct and indirect income arising from the expenses of those who came to Baku in connection with “Formula 1” on the eve of the competition."

But the officials, although they list the income, do not mention the expenses incurred during the competition.

As for whether the contract will be extended, the organization stressed that negotiations are underway to extend the contract, the result will be reported.

“Formula 1” was postponed in 2020 in Azerbaijan due to coronavirus. And 2021 passed without fans. As a result, it is estimated that the revenue from these races after the first four years is also not so great.

With proper management and organization, Azerbaijan, like other countries, would receive sufficient income from these competitions,  an economist Natik Jafarli told Radio “Azadlig.”

He stressed that “Formula 1” itself does not bring direct income: "After the promotion of the country, an increase in investments and interest brings indirect income to the country. The strange thing is that the “Formula 1” in Azerbaijan, programs related to tourism have been adopted, but tourism development is not visible. Because there is no competitive environment in the country, prices are very expensive, land borders are closed (due to coronavirus since March 2020). That is, if you are holding “Formula 1” races and its purpose is to attract tourists, then Azerbaijan does not attract tourists. That's the problem."

According to Jafarli, there is also a problem with attracting investments to the country through “Formula 1” - "The country does not receive other investments, except for the oil and gas sector. Therefore, holding “Formula 1” in itself is not a problem, the problem  is its management, since the costs are not transparent, and the balance between income and expenses has not yet been explained to us. Dividends are also not visible, because the number of tourists is not growing, and there are no foreign investors."

According to the published official position, Baku has been chosen for this race   because  the race route passes through the historical places of the city: "In the whole world, only in Monaco and Baku, races are held in the city center."

He believes that if this factor does not play a major role, the Azerbaijani side can negotiate and decide to hold a “Formula 1” race not in Baku, but in another city.