Talal Al Zain, CEO of Mumtalakat and Chairman of the Bahrain International Circuit, effectively owns a racetrack. He also owns a Porsche 911. And he loves to drive cars – fast. Yet, this weekend, he has about as much chance of taking one of his prized vehicles on to his track as you have of not feeling a pang of jealousy when I inform you that his “other car” is a midnight blue Ferrari Scaglietti 612.
For the big boys have arrived this weekend. Lewis Hamilton, Kimi Raikkonen, Fernando Alonso; all 22 drivers in fact, from all 11 Formula One teams. They have descended upon the Kingdom of Bahrain, forcing Al Zain to take a backseat.
Not that he minds, of course. As a silent investor in McLaren – Mumtalakat, the investment arm of the Bahraini Government, owns a 30 per cent share in the British racing team – Al Zain is more than happy to let the F1 team take the spotlight and allow him to deal with the economics of hosting his fifth Grand Prix in as many years.
And with Abu Dhabi joining the F1 calendar next season, he is keen to ensure all runs according to plan – although he is quick to dispel any beliefs that he views Abu Dhabi’s first serious foray in Formula One as competition.
“Raising the awareness of the sport in the region… that burden for the past five years has been on me,” says Al Zain stage-side at the Middle East Motor Sports Business Forum in Sakhir. “For the past five years, I have been pushing that awareness on my own. But Abu Dhabi next year will make people more aware of Formula One and we have many other circuits. People are pushing motor sports. If we look around the Gulf now, you can see Qatar is building a track, Dubai has built a track, Abu Dhabi is building a track, Saudi Arabia has already built two tracks and are building two more. It’s all because of the success we have experienced.”
Last year, the Bahrain Grand Prix contributed $548m (Dh2 billion) to the Kingdom’s economy, a figure reported to be between three and five per cent of the country’s GDP. Not bad for three days. Add to that the fact that last year’s income represents a 40 per cent increase on 2006 and the total cumulative impact of the past four years’ race weekends stands in excess of $1.2bn. It becomes abundantly clear why Al Zain, who paid what now appears to be an infinitesimal $150m to build the circuit initially, is keen to strengthen his ties with motor sport.
Last January, Mumtalakat bought a 30 per cent share in the McLaren Group, the owners of Vodafone McLaren-Mercedes. Al Zain insists he treats the company as he would any other and allows the group’s management to deal with matters on the track.
“In most of our investments, we do not have a ‘hands-on’ approach,” he says. “For example, at McLaren, we have three seats on the board because we have 30 per cent. We sit on the board and have constant communication in terms of finances. We see business plans. If there are issues we do not understand, or we have problems with, there is an excellent communication between the management and the shareholders.
“But for us as Mumtalakat, we never force our opinions on the management because, at the end of the day, I want to hold management accountable for performance. If I force them to do things they do not want to do, I cannot hold them accountable. That is the Mumtalakat mentality.”
Another policy of the Bahraini investment arm is to never allow passion to cloud judgment. When Al Zain was approached to become chairman of the country’s international circuit in 2005, he made it known he understood little about motor sport. Yet, he says, the response was invariably: “Great. Do not get involved on the sporting side, just focus on the economics.”
And that is what he has continued to do. McLaren found itself under increased scrutiny last season when it was revealed it had acquired confidential documents belonging to rivals Ferrari.
After a protracted court case, the team was fined $100m and docked all its points in the lucrative Constructors’ Championship. Yet Mumtalakat never wavered.
McLaren Chairman Ron Dennis has nothing but praise for his newest investors and the way they do business. “As everyone knows, our current plan has been particularly challenged over the past few months,” he admits. “But never once have my colleagues from Bahrain deviated away from what we agreed. To those who may consider investing in this country, all I can say is that it has been an amazing, emotional experience.”
One of the questions Al Zain and Dennis have to persistently field is in what way will the partnership evolve in terms of the Middle East? Abu Dhabi’s investment arm Mubadala own five per cent of Ferrari and are developing a theme park in the UAE dedicated to the Italian car manufacturers; can we expect a similar venture in Bahrain? And what about Arab drivers, how will aspirants benefit from the relationship?
Al Zain is confident, but non-committal.
“There are ongoing discussions, but there is nothing concrete yet,” he says. “We are just exploring different areas. Again, it has to come from the management. I do not want to overburden them by saying you have got to do this. I am sure, however, if I was to come up with a driver, and they prove they have strong potential, McLaren would want to take advantage of that.”
Until then, however, Mumtalakat will continue to back its adopted son, lead driver Hamilton. Which means, for this weekend at least, Talal Al Zain will be content with a red Ferrari finishing second on his circuit – the midnight blue model will no doubt reclaim the lead in the weeks ahead.
Bahrain on the ball
The UAE has long been playing ball when it comes to sporting investments, but soon Bahrain could look to score a lucrative investment in the English Premier League.
Emirates are the title sponsors of Arsenal’s football stadium, Etihad sponsor Chelsea and Dubai International Capital, the investment arm of the emirate’s government, have long been linked with a deal to buy Liverpool FC.
And while Mumtalakat CEO Talal Al Zain says he tries to avoid confrontation with his regional neighbours, if the opportunity to invest in the English Premier League “makes sense” he will not hesitate to make inquiries.
“If it makes sense, yes,” is his answer when asked about investing in football. “The thing is, there is no need for competition because there are a lot of opportunities and we can really capitalise on that. My worry when we start competing with each other is that we drive the asset prices so high that we end up paying substantial premiums. And I do not want to do that.
“But there will be areas where we will have to compete, and I will compete – but I will compete in an intelligent way, not just because I want to win. At the end of the day, I have to worry about the benefits to the country.
“If it makes sense from an investment point of view, then football is an area that I would consider.”
Driving Bahrain to the forefront