Formula 1 Teams Seek ‘Damage Limitation’ on Bahrain Decision

As Formula One teams object to holding a race in Bahrain, some need to appease their Middle East backers.

The sport’s ruling body Federation Internationale de l’Automobile last week rescheduled the event to Oct. 30 after it was canceled in March because of a government crackdown on civil unrest. The FIA said in a letter today it asked series chief executive Bernie Ecclestone to revise the decision after teams complained, citing travel disruption, amid complaints by human rights groups.

Daimler AG’s Mercedes and Red Bull are among five of 12 teams part-owned or supported by governments or sovereign wealth funds in the Gulf region. The series, owned by CVC Capital Partners Ltd., got $175.9 million from trackside advertising and hosting fees from Bahrain and Abu Dhabi races last year, according to industry monitor Formula Money.

Formula One teams “will do as much damage limitation as possible,” Shadi Hamid, director of research at the Brookings Doha Center in Qatar, said. “If they pull out, they will use a logistical or security pretext. We’re not going to see them talk about human rights.”

The race, set to start the season, was first suspended by Bahraini Crown Prince Salman bin Hamad Al Khalifa. The Paris- based FIA reinstated it after a 36-hour fact-finding mission found protests had subsided and saying the event “reflects the spirit of reconciliation in Bahrain.” Human Rights Watch spokesman Joe Stork called the decision “highly questionable” because there remains evidence of repression. Avaaz, an online campaign group, collected almost 450,000 signatures backing the cancellation of the race.

Mercedes, Red Bull

Calls seeking comment from Bahrain authorities were referred to Bahrain International Circuit spokesman Mohammed Al Awadhi, who didn’t immediately answer e-mailed questions.

Today, the FIA head Jean Todt said in a letter to teams that the group asked Ecclestone to re-examine his calendar proposal and if necessary, to resubmit a revised proposal to the world council” governing the sport.

The Mercedes team is part-owned by Abu Dhabi’s Aabar Investments PJSC, which also sponsors Red Bull GmbH’s second team, Toro Rosso, through its Falcon Private Bank Ltd. unit. McLaren is part-owned by Bahrain Mumtalakat Holding Co. and Williams has had a partnership with Qatar’s government to develop automotive technology since 2009. Ferrari advertises Abu Dhabi’s Ferrari World theme park on its cars.

The Gulf states bankroll Formula One to attract investment and tourism to their region and Bahrain had hoped that staging the race in October “would be a sign that it is safe to do business in Bahrain again,” Hamid said.

Gulf Solidarity

“The other states will be keen to show solidarity with Bahrain in the face of external pressure” to protect themselves, said Jane Kinninmont, a senior research fellow for the Middle East and North Africa at U.K. foreign think tank Chatham House. They “won’t be pleased” if Formula One sets a precedent by withdrawing from Bahrain on human rights grounds, Kinninmont added.

Reinstating the Bahrain race would mean delaying a race in India and extending the schedule into December for the first time since 1963. Mercedes team manager Ross Brawn told reporters last month that was “totally unacceptable” because staff already spend much of the eight-month season away from their families.

‘Disruption and Cost’

The teams’ association also said altering the schedule “would cause an unacceptable degree of disruption and cost” and they might struggle to get insurance coverage, according to a June 7 letter to the FIA, which the ruling body published on its website today.

Officials from Ferrari, Mercedes, Red Bull, McLaren and Williams declined to comment for this story. In their letter, they said Bahrain, which held races since 2004, “has always hosted us with enthusiasm and warmth.”

“Formula One will want to play along” with Bahrain as much as possible, Hamid said. Teams “stand to lose a lot if they are seen to be on the wrong side of the Gulf states.”

To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net

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