May 21, 2009 / 12:07 AM / 10 years ago

Credit crunch weighs on Monaco GP

MONACO (Reuters) - 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.

BMW Sauber Formula One driver Nick Heidfeld (L) of Germany and Renault Formula One driver Nelson Piquet of Brazil drive their cars during a training session for the Monaco F1 Grand Prix in Monte Carlo, May 24, 2008. REUTERS/Robert Pratta/Files

The aviation, beer and liquor tycoon, who also owns the Force India Formula One team, has his 95-meter yacht ‘Indian Empress’ moored in the Mediterranean principality’s harbor 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 on Friday 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 told Reuters 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.

“I think generally they (CEOs) don’t want to be seen to be lavishing money around, which is quite right.”


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.

“There are feelings of discomfort, they (company executives) feel their shareholders might be looking at it the wrong way rather than in a positive light,” he told Reuters at this month’s Spanish Grand Prix in Barcelona.

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

“They (RBS) have made a decision that this year they feel as if it wouldn’t be appropriate because of the perception of other people,” he added.

“My observation to that would be that business has still got to go on and in fact we’ve got to build back the business. If some of the right people are there and we are not then we are missing an opportunity.”


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.

Their impressive yacht is still there, but unbranded in a harbor that on Wednesday looked less crowded than in the past, and business will be conducted at a more secluded villa.

“Obviously things have changed from 2008 to 2009,” Steinmetz’s Lior Levin told Reuters. “We had a lot of thought going back to Monaco and obviously we toned down the whole event.”

Stewart, who won in Monaco in 1966, 1971 and 1973, said there was no danger of the principality losing its allure in the long term.

McLaren Mercedes' Formula One driver Lewis Hamilton of Britain drives during the qualifying session of Monaco's F1 Grand Prix in Monte Carlo, May 24, 2007. REUTERS/Robert Pratta/Files

“Monaco is as strong and as colourful and as glamorous and exciting as it always has been and will remain to be,” he said.

“It’s the opening event for the Riviera season and everyone comes to it, whether it’s from the skiing resorts or Latin America or Asia-Pacific.

“If it starts to be tainted by ‘We shouldn’t go there because we’ll be identified as being playboys’, then I think that’s completely wrong.”

Editing by Clare Fallon; To query or comment on this story email

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