Financial concerns trigger Malaysia calendar withdrawal

Malaysia's expected return to Formula E has reportedly been axed after the nation withdrew from hosting duties, following huge concerns over new financial demands. 

According to Free Malaysia Today (FMT), Malaysia was set to host the Formula E season finale for next year's Gen 3.5 cars, at the iconic Sepang International Circuit (SIC). 

According to local reports, the race was initially meant to be held at the KL City Circuit, but was moved to SIC. Supposedly, tension grew between Formula E and its local partner, Sports Tech Holdings, with the latter having been behind the change in venue. 

Formula E reportedly wanted it to be a street race close to the capital city of Kuala Lumpur, only for Sports Tech Holdings to make the venue change over technical challenges. 

The tension is believed to have been caused by a rise in the rights fees and commercial changes. Formula E last raced in Malaysia back in 2015, with the Putrajaya E-Prix.

“The new race fees are beyond our financial capacity, and we did not want to financially burden the government," said Sports Tech CEO Wan Agyl Wan Hassan, as reported by FMT. 

He added: “If there is no economic value, why should we continue?”

Malaysia's withdrawal is the nation's latest setback in bringing back a single-seater world championship, with F1 having not raced in the country since 2017 also due to financial concerns. 

Despite Sports Tech stating its disappointment at the finances, Formula E is known to contribute a significant amount per race, typically around $100 million. This figure has been publicised by other venues. 

“Our decision to step back from this opportunity stems from differences in expectations regarding the event’s scope and financial framework," continued Wan Agyl.

“The economic conditions and the scale of investment required did not align seamlessly with our strategic priorities or financial planning.

“The significant upfront costs, coupled with our assessment of the potential returns, led us to conclude that a re-evaluation of our involvement was necessary.

“This decision reflects our commitment to aligning our ventures with Malaysia’s economic realities and our strategic objectives.”

A non-disclosure agreement between Formula E and Sports Tech means the rights fees cannot be stated, although the breakdown occurred following talks after the nation gave the green light for the race to happen last month. 

“We understand that this decision may disappoint the motorsports community and fans and we apologise for any anticipation this may have caused," stated Wan Agyl.