Malaysia has brought F1 back. Should taxpayers pay to keep it?

Formula One returned to Sepang this October with crowded grandstands and renewed political enthusiasm. The more consequential result may emerge after the cars have left: a calculation of what Malaysia gained, what it spent, and whether the country should commit to doing it again.

The October 2–4 event was an unusual arrangement. Malaysia hosted the Bahrain Grand Prix after the race was relocated from the Gulf kingdom. Formula 1’s announcement restored Sepang to the season’s itinerary, but did not secure an annual Malaysian Grand Prix.

That possibility is now being discussed. At Sepang on October 4, Prime Minister Anwar Ibrahim confirmed talks about a future return. A permanent place would require a financial commitment extending far beyond one successful weekend.

The difference is who pays

Bahrain covered this year’s hosting rights fee. In July, Sepang International Circuit chief executive Azhan Shafriman Hanif put that fee in the region of US$70 million–US$80 million, while approximately RM40 million in local preparation costs would be shared between the Malaysian and Bahraini sides, according to RTM.

A Malaysian-funded annual race would have different economics. Azhan estimated that a permanent return would require at least RM300 million a year. He also identified an obstacle that money alone cannot resolve: an available place on the championship calendar.

At that annual figure, five years would amount to at least RM1.5 billion, before any additional expenditure outside the estimate. That arithmetic is not a negotiated contract price. It shows the scale of the commitment that a long-term proposal would need to explain.

FIA president Mohammed Ben Sulayem has called for a business plan covering at least five years, including financing, promotion and logistics. His encouragement leaves the door open; it does not award Malaysia a race.

A billion-ringgit benefit needs careful accounting

The economic case deserves serious consideration. Hong Leong Investment Bank projected that this year’s event could produce RM1.1 billion–RM1.3 billion in additional economic output. Hotels, airlines, restaurants and retailers stand to benefit when visitors arrive for a race weekend. The estimate was reported by Bernama.

Economic output is not government revenue, however, and a forecast is not a completed assessment. A foreign visitor who comes specifically for F1 brings new spending into Malaysia. A resident who buys a race ticket instead of spending the same money elsewhere presents a different calculation.

Economists interviewed by Bernama argued that the assessment should measure additional foreign spending and local benefits, then account for imports, displaced activity, subsidies and public costs. The comparison should be with what would have happened without the race.

A credible business plan would show both the benefits to businesses and the cost to taxpayers. Combining them into a single impressive “return” can hide who receives the money and who carries the liability.

Can the crowds be sustained?

CNA reported approximately 261,000 attendances across the three-day weekend. That demonstrates substantial interest, although it should not be read as 261,000 distinct visitors. The same reporting documented transport problems, with some spectators describing journeys lasting several hours.

Experts questioned how much demand reflected the novelty of F1 returning after nine years, and whether it would persist once Sepang became an annual event again. Repeat attendance depends on the entire experience: accommodation, access to the circuit, queues and the journey home.

Those questions belong in the financial model. A plan that assumes every future weekend will reproduce the excitement of a long-awaited comeback would give taxpayers little protection if the audience shrinks.

What Singapore can teach Malaysia

Singapore provides evidence that a Grand Prix can become a durable tourism event. In 2025, its government reported that the night race had attracted more than 720,000 international visitors and generated over S$2.2 billion in tourism receipts since its inception. These are cumulative figures, not annual profits. Singapore Tourism Board

There is also a mechanism connecting some beneficiaries to the bill. Singapore requires hotels to contribute a race-related cess because they are expected to benefit from higher room rates or occupancy. The hotel contribution

Malaysia need not copy that arrangement exactly. But it should establish whether businesses expecting substantial gains would commit money alongside the government.

The decision before the next contract

Southeast Asian businesses already participate in Formula One through technology, sponsorship, promotion and driver support. Hosting a Grand Prix would need to deliver additional benefits that justify its additional costs. A company’s willingness to sponsor a team is not a commitment to underwrite a national race.

Before signing a long-term agreement, Putrajaya should publish the October event’s full public expenditure, an independently assessed account of additional visitor spending, and a financing proposal showing how risks would be shared. Forecasts should include weaker attendance and higher costs as well as the optimistic case.

The circuit has demonstrated that it can bring Formula One back to Malaysia. The decision now is how much Malaysians should pay to make it stay.