Red flag

Formula One has failed to see the red flag in Bahrain. The prestigious sporting event won't gain much from holding a fixture on this tiny Gulf island still in turmoil from its Arab uprising, amid sharp condemnation of human rights abuses. Pushing on with the weekend event looks like a stubborn and risky miscalculation.

Emerging markets do offer major sporting events a chance to grow their fan base and ensure a stronger financial future. The F1 racks up an annual revenue of $2 billion through 20 events. The Grand Prix is now held in India and China. Gulf countries have tiny populations, but they are cash-rich. Bahrain's sovereign fund owns part of the McLaren team. Abu Dhabi has a Ferrari World theme park, and a race car even decorates the lobby of one of its plush government offices.

Yet abandoning the Bahrain race for a second consecutive year would not have amounted to an exit from the Gulf. The F1 already has another foot in the lucrative market with the Yas Marina circuit in the UAE, one of Bahrain's richer and more stable neighbours. Without too much trouble, the F1 could have relocated the race without losing out on the revenue or regional brand building provided by the events.

As it stands, the Bahrain F1 race is a shadow of itself. Major sponsors of the sport include Royal Dutch Shell, Vodafone, Unilever, Total, Siemens, UBS, News Corp, Hugo Boss, ExxonMobil, Deutsche Post, Daimler and Thomson Reuters. Some of these companies are sufficiently wary of how the turmoil might impact the weekend's event to pare back usual efforts to entertain clients around the race.

All of the above makes the F1's decision to stick with Bahrain high-risk and low-reward. While the situation in the Gulf state has calmed somewhat since Saudi Arabia sent in its tanks last year, life in many poorer suburbs is now a new normal of tear-gas and running battles with the police. Bahrain is a divided Shi'ite majority country where even the Sunni-monarchy is split. This week-end's F1 bet could misfire badly, and then it will be too late to realise that it wasn't worth taking.