Private sector has interest in funding South African F1 race – McKenzie

Gayton McKenzie, the Minister of Sports, Arts, and Culture, has provided insight into how a South African F1 Grand Prix would be funded.

Speaking in parliament, McKenzie said that the government would not need to pay for the race, as private companies have expressed their support for the race.

Furthermore, he said these businesses – which reportedly include major names like MTN, MultiChoice, and Heineken – will form part of a critical meeting between South Africa’s representatives and the FIA later this month.

“Government will not be expected to pay,” said McKenzie.

“Companies like MTN, MultiChoice, Heineken and many more have raised their hands and said “here we are, Thuma Rona.” 

It is unclear what value these companies would receive from funding the race, as all track-side advertising and corporate hospitality is facilitated by Formula One Management (FOM) through its agency Allsport Management.

This means that Kyalami – which seems all but confirmed to be the preferred race host – cannot offer and monetise advertising space to these companies to subsidise the cost of hosting the Grand Prix.

However, North West University economics professor Waldo Krugell has previously highlighted that major events – including an F1 Grand Prix – can lead to additional spending in the areas surrounding the race.

This was evident when Cape Town hosted a Formula E race, which was estimated to generate over R1 billion in economic impact despite being far less popular than a Formula 1 race would be.

Bringing back a South African Grand Prix

The last South African F1 Grand Prix was hosted in 1993, but McKenzie has made it a priority of his term in office to bring a Formula 1 race back to the country.

Major progress was made last month, when the Kyalami Grand Prix Circuit received Federation International de l’Automobile (FIA) approval for its Grade 1 amendment plans.

These plans are required to ensure that Kyalami would be qualified to host a Grand Prix under modern FIA requirements.

“This is a defining moment for South African motorsport,” said circuit owner Toby Venter.

“When we acquired Kyalami in 2014, we made a commitment to restore it not just as a world-class venue, but as a beacon for motorsport across the African continent.”

“The FIA’s acceptance of our Grade 1 design is a major step forward in that journey.”