FORMULA ONE: CYPRUS INGREDIENT INVITES CONTROVERSY

UNCLAS ISTANBUL 001575

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL TU
SUBJECT: FORMULA ONE: CYPRUS INGREDIENT INVITES CONTROVERSY
IN ISTANBUL



1. (U) Summary: For the second year in a row, Istanbul
played host to Formula One Grand Prix, the world's biggest
motorsports organization with a reported fan base of
approximately two billion people. Brazil's Felipe Massa
edged out Spain's Fernando Alonso and race favorite Michael
Schumacher to take home the victory cup in a controversial
ceremony that included the "President" of the "Turkish
Republic of Northern Cyprus" ("TRNC"),recognized only by
the Government of Turkey (GOT) and Azerbaijan. The three-day
event drew a total of 135,000 spectators, including 80,000 on
the final race day -- disappointing figures compared to last
year's draw (182,000 and 110,000, respectively) and pre-race
expectations for 235,000 plus spectators. End Summary.

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POST RACE FUMES VISIBLE FROM CYPRUS
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2. (U) After weeks of anticipation, amplified by a barrage
of advertising, including ubiquitous posters and television
commercials, Formula One Grand Prix came to Istanbul 25-27
August for the 14th leg of an 18-event 2006 season. While
the event was organized by Turkey's leading business
federation, the Turkish Union of Chambers and Commodity
Exchanges (TOBB),the Greater Istanbul Municipality, Turkey's
General Directorate of Highways and the Akfirat local
municipality contributed heavily to bring Formula One to
Turkey by building approximately 15 miles of four to six-lane
divided highway feeder roads connecting the track venue to
The European Highway (TEM). Mostly new, air-conditioned city
buses brought the curious from central Istanbul gathering
points to the track. Glitzy kiosks at the Grandstand
featured lavish new car BMW displays, Intel chips that control
split-second timing in many of the race cars and, of course,
a wide array of Formula One clothing and memorabilia for eager
consumers. Meanwhile, on the closed loop tracks below, cars
reached speeds of 226 mph as engines punched doppler effect
decibels to ear-piercing levels.


3. (U) While competitors faced risks on the track, a game
of political risk played itself out off-track as Rifat
Hisarciklioglu, head of TOBB -- and frequently referred to
as a possible political hopeful -- asked "TRNC" "President,"
Mehmet Ali Talat, if he would be willing to present the
victor's cup. "Shortly before the race was over, I asked
Mr. Talat to do it. We told the F1 administration as well,
and they had to agree as we are the hosting country," said
Hisarciklioglu according to Turkish press reports. The Greek
Cypriot government immediately stated it would bring a
complaint against Turkey to Formula One's oversight agency,
the FIA, which announced today that it would investigate the
matter. The Chairman of the Istanbul Chamber of Commerce
(a subsidiary of TOBB) Murat Yalcintas, claimed that the
decision was worth the risk. According to press, GOT
Justice Minister and government spokesman Cemil Cicek stated
that Mr. Talat was recognized by Turkey as the "President" of
the "TRNC". "That's how we see it, and as of now, it's not
that important how others see it."

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SHORT TERM COSTS JUSTIFY POTENTIAL LONG TERM GAINS
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4. (SBU) Though the economic impact of this year's Formula
One event in Turkey has yet to be calculated, a recent
Deloitte & Touche report expected spectators to spend
around 43.5 million euro (USD 55.6 million),including 27
million euro (USD 34.5 million) in spending by foreign
tourists. The report also argues that Formula One should
be profitable for Turkey in the long term despite its
initial investment of 220 million euro (USD 281 million)
for construction of Istanbul Park and an annual fee of 13.5
million euro (USD 17.3 million) payable to Formula One
Administration. It is unclear whether lower than expected
attendance also reflects a smaller than expected foreign
spectator presence at the event. (Note: Turkish tourism as
a whole decreased this summer relative to 2005 amidst an
increase in PKK activity. End note.)


5. (SBU) Comment: Felipe Massa and his Team Ferrari may
have won the race but the "TRNC" stands to be the big
political victor coming out of this weekend's events. The
Formula One Grand Prix series commands a television
audience third only to the Football World Cup and the
Olympics. And while appearing on such a large global stage
may not bring the "TRNC" immediate political recognition, it
is sure to increase its name recognition. Turkey, for its
part, by hosting Formula One, a principal object of passion

among European sports enthusiasts, demonstrated that more
than the TEM connects it to the rest of Europe. However,
the last-minute decision by Hisarciklioglu -- who does not
represent the GOT -- to put the "TRNC" in the limelight
also fanned the flames of antipathy with the Greek
Cypriots at a delicate time for Turkey,s EU accession
negotiations. End Comment.
JONES