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Sat 4 Nov 2006 08:00 PM

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Dash for cash

Basil Shaaban is making an ambitious bid to become the first Arab F1 star. He needs sponsors - but what’s in it for them? Chris Whyatt reports.

Picture the scene: A beaming figure celebrates triumphantly atop a sun-drenched winners’ podium. Transfixed up close is a coterie of glamorous A-list celebrities and, from afar, a global TV audience of 100 million-plus worship their new hero. But what’s that flapping proudly in the wind? The Lebanese flag. Formula One has a new star. World sport has a new star. And that star, finally, is an Arab.

This is the dream being played out every minute of every waking hour in the mind’s eye of A1GP star Basil Shaaban. Currently representing Team Lebanon on the A1GP circuit, the ferociously ambitious Beirut-born, Abu Dhabi-raised racing driver has just launched an audacious bid to become the first Arab to compete in F1. “To get an Arab driver into F1 would be a massive inspiration, not just for companies on a marketing level, but also psychologically and emotionally for the Middle East and Arab youth, to show what we are truly capable of,” Shaaban tells Arabian Business.

Yet turning that vision into reality is going to require serious commercial backing, not just the collective goodwill of his people and world-class sporting talent. On a personal and collective crusade, 26-year-old Shaaban is aiming to power his breakthrough into the racing elite by getting onto the Grand Prix circuit with a two-to-three-year assault on the traditional F1 ladder championships: British Formula Three International and the GP2 Series. However, to get onto the first rung of that ladder, Shaaban is looking for cold hard cash from investors looking for the potential opportunity of a lifetime.

Every year major companies throughout the world pump millions of dollars into sport through endorsement deals. HSBC, ‘the world’s local bank’, stumps up one of the biggest cash prizes in golf in order to attach its name to the front of the World Match Play Championship. And take the UAE’s Emirates Airline, the fastest-growing airline in the world. Such is the level of financial investment it has committed to Arsenal Football Club, the Gunners - one of the biggest names in world football - felt compelled to name their new stadium after the airline. Emirates has also successfully spread its now-famous brand across the globe through other sponsorship deals in cricket, football, rugby, sailing and F1. These examples are indicative of a rapidly-growing worldwide trend.

The first specific step on the challenge-strewn road from relative obscurity to worldwide sporting success is securing the backing of sponsors Shaaban needs to embark upon a Formula Three programme next year, which takes place from April through to October. (Shaaban does, however, remain committed to A1 Team Lebanon in the winter season). Already in discussions with two F3 Championship-winning teams - P1 and Carlin - both of whom the 26-year-old claims are eager to secure his services, Shaaban and advisors are also in advanced talks with a number of multinational and Arab businesses in Dubai and Beirut: Telecoms, energy, airlines, and real estate companies. Landing on the table before them is a carefully mapped out, ‘sophisticated sponsorship package’ - SHAABAN2F1.

“I’m hoping to find in the Middle East the companies and individuals who share my vision, who are willing to stand up and join me in this mission to realise the dream of showing the excellence of the Arab world on an international scale,” says Shaaban, pointing out that though strong levels of interest have been forthcoming, no agreements have yet been signed and sealed. The premise of SHAABAN2F1 - made up of five tiers ranging from Platinum to Associate and structured to entice a spectrum of companies with differing budgets and aspirations - is that it will give backers broad-ranging promotional benefits on a pan-Arab and global basis, including “massive exposure” according to Shaaban, via the all-important TV rights he hopes to secure ownership of from ART Sport for next season. This, though, is dependent upon financial backing. If secured, the rights would then in theory be given back to ART Sport, to ensure pan-Arab coverage, and also distributed “for free” - again in theory -to networks such as Dubai Sport in the UAE and Future TV in Lebanon.

If money talks in sport, television is its lucrative mouthpiece. The Dubai-based International Cricket Council, for example, is presently negotiating the sale of their broadcasting and marketing rights for 2007-2015. According to Ehsan Mani, the former president of the sport’s world governing body who led the last round of negotiations, the ICC is hoping to bank a record US$1bn this time around - a phenomenal sum given there are only a handful of test-playing nations worldwide. But such is the clamour from multinationals tripping over each other to promote their brand via cricket, broadcasters can still be confident of serious profit.

“Cricket provides an enormous amount of content to people, you get seven or eight hours of actual action per day,” Mani told the BBC last month. “So when you look at the cost effectiveness of cricket as a medium for sponsors to televise and get the message out regarding their products and services, it’s a very cost effective way of doing it.”

Just like cricket, motor sport takes place over hours and days. In the case of F1, millions of eyeballs are regularly glued to screens throughout testing, qualifying and the race itself. Such lengthy coverage equals value-added brand exposure.

In 2005 F1 spent over US$2.5bn, more than the GNP of a small African country. But increased income and profits were the result. The FOA, the company which controls the commercial side of F1, reported a pre-tax profit of US$435m in 2005, up from US$413m the previous year, and income increased to US$787m, up from US$705m in 2004. FOA brings in most of its revenues from selling worldwide TV and media rights to the series as well as race licenses. Some of the sponsors feeding that frenzy? Allianz, AMD, Bacardi, Diageo, SAP, LVMH, Fosters, RBS, Emirates, Intel and Red Bull.

“There is a lot of investment and forward thinking going on in the Middle East now,” says Shaaban, “and I think this is part and parcel of joining the development of sport and marketing worldwide. So many leading global brands are doing this now - using the vehicle of motor sport to promote their brand values and attitudes: Ambition, excellence, precision, youth and excitement. F1 has the largest annual championship in the world, and it’s there for the taking. I think Dubai is a key market in order to be a pioneer in this type of mission. The Arab market is ripe right now for this type of opportunity.”

Backing Shaaban is the biggest Arab name in motor sport to date, Mohammed Bin Sulayem. Fourteen-time FIA Middle East rally champion, a close friend of Michael Schumacher, and now president of the Automobile and Touring Club for the UAE, Bin Sulayem is throwing his considerable weight behind Shaaban’s pioneering bid for stardom for two reasons. Firstly, he is adamant it’s only a matter of time before an Arab driver breaks into F1. Additionally, sophisticated sponsorship packages aside, he thinks Shaaban has what it takes in terms of talent and determination.

“We are hungry to see an Arab competing at the top. But motor sport is not just a sport, it’s a business. So it’s not just about the way you drive, it's about the way you communicate,” he explains, referring directly to the relationship a driver needs to have with his sponsors. “When the race is over, that’s where the politics start. And that’s where your relationship grows with your backers. I saw millions poured into my team. You can win most times, but that’s not necessarily the only key point. You must have a close relationship with all those involved. People have to know you in the media. You have to address them well and continue improving in all these aspects.”

Listening to the case put forward by Shaaban - a vibrantly intelligent, California-educated, engaging character with arresting looks and an eloquence in both English and Arabic – it’s evident he ticks all the right boxes on that front: He’s clearly got a marketable personality and has the potential to become a role model for Arab youth. When he looks you in the eye and tells you that the value that sponsors would get back from investing in British F3 2007 would be huge, through the TV rights and a specific promotional strategy across the Middle East, you don’t for one second get the impression of a salesman delivering his patter. You are left 100% convinced that here is a passionate man with a plan and a firm grasp of the bigger, potentially history-making, picture.

The magic number Shaaban is chasing, initially, is around US$1.4bn: The cost of a full season in British F3 comprising of 22 races, a critical 30-day testing programme, and a comprehensive public relations programme designed to promote sponsors across the Middle East. British F3 is considered to be the most competitive F3 championship in the world, the place to cut your F1 teeth. Mika Hakkinen and the late Ayrton Senna – both role models for Shaaban – both graduated from there, along with the top drivers in GP2 and test drivers in F1. “That’s where I want to show my stuff,” insists Shaaban.

So isn’t it about time the Middle East began investing some of its money back into its own talent? To attempt to promote itself on a global stage for something other than real estate projects? To put Shaaban’s situation into a lucid financial context, look at the approximate cost of a securing an (admittedly giant) advertising hoarding on Dubai’s Sheikh Zayed Road for 12 months: Five million dirhams. Roughly the same figure it would take to fire Shaaban into his all-important breakthrough season and that first crucial step on the F1 ladder. Which is more worthy? And isn’t that a drop in the ocean to some companies? There are no guarantees, but a hard-nosed business analysis might well conclude that a punt on SHAABAN2F1 would be well worth the investment in the long term.

One influential player on the Middle East motor sport scene certainly thinks so. Martin Whitaker, general manager of the Bahrain International Circuit, the entity which brought the first F1 Grand Prix to the region says: “It depends what companies want to do with sponsorship activity - sell goods, create brand awareness or simply raise their profile? But if the guy's got the talent, it’s not a bad time to start an association with him here at the outset. There are plenty of examples of sponsors who have gone all the way up with young drivers and it has really paid off for them.” Gulf Air recently extended its own title sponsorship of the Bahrain Grand Prix until 2010. It says the sponsorship has boosted its image through brand association with the sport, resulting in significant revenue growth.

Whitaker is confident about the overall prospects of an Arab breaking into F1, citing the case of another major rising local talent: 19-year-old Bahraini driver Hamed Al Fardan, believed to be on the verge of securing a US$200,000 investment deal with Gulf Finance House for his own bid to reach motor sport’s Mount Olympus.

“The region needs F1 drivers. You can run the best GP, you can have the best facilities, but you need to make it work on a weekly basis with a view to generating grassroots-level motor sport,” says Whitaker. “What you need as a catalyst is to develop the sport. To a degree, I think that is beginning to happen in the Middle East – but clearly you need the investment to make that happen.”

If the commercial side makes sense, and Shaaban clearly has a marketable personality with buckets of charm, the key question is whether he possesses the driving talent.

“It is seldom these days that I come across a rookie driver as talented as Basil Shaaban,” says former Team Lotus F1 driver, Martin Donnelly. “From what I’ve seen, Basil possesses all the natural abilities to become the Middle East’s first big F1 racing name.”

With F1’s powerbrokers now looking away from Europe, the sport’s traditional hub, towards new markets to generate income, the Middle East would do well to be aware of the charm offensive currently being conducted in the Far East, especially China and Korea.

The sport’s rapid expansion into new, potentially lucrative markets means that it will need new heroes, from previously untapped parts of the world, around whom to hang the winner’s wreath. Regional F1 TV rights-holder Al Jazeera Sport ran pictures of Michael Schumacher departing the stage just weeks ago. Wouldn’t the Arab world love to watch F1 ushering in its own global hero in the years to come?

"To get an arab driver into f1 would be a massive inspiration"

"Isn’t it time the middle east began investing its money back into its talent?"

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