Why is Malaysia hosting F1 in 2026 without paying FOM fees?

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Malaysia to Host 2026 Formula 1 Race Without Paying FOM Fees

Malaysia will host the 2026 Formula 1 Grand Prix as a one-off replacement for Bahrain, a unique arrangement that exempts the nation from paying the substantial annual license fee to Formula One Management (FOM). This exemption is due to Bahrain having already fulfilled its financial obligation for the 2026 season, effectively allowing Malaysia to benefit from the global spotlight without incurring the significant cost that previously led to the race's discontinuation.
Financial Exemption from FOM Fees

The primary reason Malaysia is able to host the 2026 F1 race without paying FOM fees lies in Bahrain's pre-existing payment for the season. Reports indicate that Bahrain's annual license fees to FOM range between US$70 million (approximately RM298 million) and US$80 million. As Malaysia is stepping in for Bahrain's scheduled slot, the obligation for this fee has already been met, thereby absolving Malaysia of this major expenditure.
Historical Context of High Hosting Costs

Malaysia's previous tenure as a host of Formula 1, from 1999 to 2017, was characterized by substantial annual license fees paid to FOM, amounting to hundreds of millions of ringgits. These considerable financial commitments were consistently cited by the government as a primary factor in the decision to terminate the contract and cease hosting the event in 2017, making the current arrangement a significant departure from past financial burdens.
Reduced Preparation Costs for Sepang Circuit

Beyond the exemption from FOM fees, the financial outlay for Malaysia to host the 2026 race is considerably lower compared to its previous hosting periods. The Sepang International Circuit (SIC) will require an estimated RM40 million for necessary preparations. This contrasts sharply with the multi-hundred-million-ringgit license fees that were a contentious issue for taxpayers during Malaysia's earlier involvement with Formula 1.

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Why is Malaysia hosting F1 in 2026 without paying FOM fees?

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