What Malaysia's anger reveals about F1's problems

When news broke that Malaysia will drop off the Formula 1 calendar at the end of the season after reaching agreement to end its deal a year early, the reaction was largely muted.

If the same had happened to the likes of Singapore, Australia or Britain, there would very likely have been more of a fuss due to the characters of those events.

But the departure of Malaysia, which joined F1 in 1999, marks an end of an era after a 19-season stint. Only 11 other circuits on the calendar have enjoyed a longer unbroken run.

Malaysia was the first of a new wave of countries that committed to pumping significant investment into F1 in the form of race fees and the creation of a bespoke circuit. Of those that have followed suit since, Mexico, Azerbaijan, Russia, the United States, Abu Dhabi, China, Bahrain and Singapore remain. India, Turkey, South Korea and Valencia have dabbled but since vanished.

That Malaysia can no longer play host to F1 because, in the words of the organisers, "the numbers are not there" is of real concern.

Bernie Ecclestone has already admitted he charged venues too much for the honour of hosting a grand prix, comments several other promoters are understood to have found hard to stomach.

"I just felt ripped off in some ways, even though we were not forced to sign the agreement," says Malaysian GP chief Dato' Razlan Razali when asked about his response to Ecclestone's comments. "But to come up with a statement like that - how does it make us feel?

"All this time you have been overcharging us and we are not getting what we want, such as good racing and access to drivers and teams.

"Of course, nobody put a gun to our head but for you to come up with comments like that makes us feel worse. It makes us feel like we've been conned and we're not getting what we paid for."

While Monaco is an anomaly in that it doesn't pay a race-hosting fee, such is its importance, every other race stumps up a figure that sits on a wide spectrum, and new races pay the largest sums. Sochi is believed to have signed for £25million for the opening race, while Baku pays even more.

The race-fee contracts generally feature some form of escalator that involves the figure rising each year, making it increasingly challenging to make hosting a grand prix financially viable.

Countries have found a way to make it work, particularly because of the value that a global championship like F1 brings. Malaysia was aided by government support, with the country's national oil and gas company Petronas the title sponsor.

But in the past couple of years that financial strain became too much.

Talks with Ecclestone began about an early release. They continued with Liberty Media, when the new owner came onboard. The American company attempted to keep Malaysia by offering to reduce the fee, among other things, but it wasn't low enough.

It's also believed there was a feeling among the race's organisers that Liberty was not fussed whether or not Malaysia stayed on, and was instead more focused on keeping other races that it felt were more important - such as Singapore and Australia - and attracting new ones.

So what does this mean for the future of F1? Liberty has already said it's keen to expand F1 in America, adding to the existing race at Austin, with Las Vegas, New York and Long Beach being mentioned.

It also wants to protect the European heartlands, with the French Grand Prix making a return next year, having disappeared after the 2008 running, and hold more races in Latin America and Asia. When it comes to Asia, it seems F1 has options in mind - and Malaysia isn't one.

But who's to say more circuits won't follow Malaysia's example?

"Until Sebastian Vettel's domination, we were able to make the grand prix financially viable," says Razali. "There was an escalator in the contract, but the economic impact was positive.

"The F1 show was great. F1 solidified its position as the pinnacle of motorsport. If that continued, we could live with it. But the quality of the show began to drop and really spiralled when the drastic engine regulation change was introduced in 2014."

From there, the spectator numbers at Sepang started to drop. So did the TV ratings. But the fees for hosting the race continued to rise as scheduled. Malaysia searched for ways to make the deal work and extended the contract in 2015 by three years to '18. It kept the tickets cheap, with prices among the lowest on the calendar. But ultimately it admitted defeat.

Race promoters are not forced to sign contracts to host F1. It's their choice. But given the vast sums of money they have to pay, not enough has been done to support the events and help them succeed. And that's something new chairman Chase Carey has admitted.

"Some of the things that should have been done to support the events, marketing the sport better, creating access to digital platforms to bring in new fans, to provide research to understand how you make it better, those sorts of tools didn't exist," he told the Financial Times.

In an attempt to stem falling attendances, circuits have tried to boost the 'added value' elements during a race weekend. Singapore has successfully attracted a string of A-list artists to perform in post-session concerts, with Duran Duran, OneRepublic and Ariana Grande pencilled in for this year.

Austin drafted in Taylor Swift last year and it had a noticeable impact on attendances. But many circuits can't compete with that. And Razali raises a fair point when he suggests promoters should not have to do that to attract audiences, because the racing should be good enough to do that and everything else should be a bonus.

"If promoters have to resort to bringing other components to make F1 exciting, such as concerts, if we have to resort to that, to bring A-list artists to perform, it shows that's not right," he says.

"We do bring an act, to bring an additional experience to the spectators, but we do it to ease traffic. So rather than people going out and creating a traffic jam, it eases congestion while also having a wholesome experience. But it has got out of hand. It became like 'now F1 is here, but who is going to be your act'?

"It becomes the other way around. They come for the concert rather than F1. MotoGP has been around for 26 years and we have never had any concerts. And we get strong attendances [last year MotoGP attendance at Sepang was around 160,000, almost double that of F1]. The sport sells by itself. Now it's bigger than F1 in Malaysia."

Of course, Razali's comments must be taken with a pinch of salt, given that he is speaking after losing F1, which leaves MotoGP as his circuit's showpiece event. But you could argue that three years of a title battle involving two drivers in the same team has not helped attract fans to the circuit.

Encouragingly, the opening four races of this F1 season have featured three different winners. If that continues throughout the season and into the next, it can only be good news for promoters.

F1's new owners seem keen to make the racing the focal point, drafting in ex-Mercedes team boss Ross Brawn to create a long-term, well-thought-out plan, while also maximising the commercial aspects of F1. Ultimately, that makes good business sense.

The key is whether the right balance can be achieved. Otherwise, other countries may soon follow Malaysia's lead.