With the BJP now holding the reigns in both the Centre and the State, and with Liberty Media’s new approach towards helping race promoters, Vinayak wonders if the Indian GP can make a comeback.
Way back in 2012, Sameer Gaur, the managing director and CEO of Jaypee Sports International, was explaining how being the promoter of the Indian Grand Prix could end up being profitable for JPSI – and its parent company, the Jaypee Group. But it sounded like a hard sell, to say the least, for a couple of reasons. First, because the plan to be profitable hinged on the Jaypee Group finding success in the real estate sector, which was not its core business and heavily dependent on real estate trends. The plan to sell land along the Yamuna Expressway and other properties around the Greater Noida area was meant to absorb the losses incurred by hosting India’s inclusion to the Formula 1 calendar – which brings me to the second reason.
Being a promoter for an F1 race was a loss-making exercise under the regime of Bernie Ecclestone, unless significant government help was forthcoming. With revenue streams, excluding ticket sales, being unavailable to a promoter, Jaypee struggled to get anywhere near the break-even point – especially when you consider that they spent upwards of `2,000 crore to build the world-class Buddh International Circuit.
Gaur had mentioned that he was trying to re-negotiate the terms of his contract with Formula One Management (FOM), but that became a moot point with India no longer being that attractive a destination for F1 under Ecclestone. With numerous hassles, regarding visas and customs – not to mention the fact that a tax was levied on the income of the FOM, teams and drivers – the event took its last bow in 2013. Attendance had also dropped well below the inaugural event’s 95,000, after virtually no efforts were being put into promoting the event due to a lack of funds.
Promotion of the Indian GP, should it ever return, is left to JPSI but the change in F1’s ownership and the BJP winning the Uttar Pradesh state elections could eventually lead to at least two more editions of the Indian GP – two more races are left on JPSI’s contract – if not more.
Liberty Media, F1’s new owners, have started to make small steps to show that Grand Prix racing may not be as aloof as it once was under Ecclestone. Lifting social media restrictions on teams and drivers was one such step, but at a bigger level they have also questioned the previous management’s methods of picking ‘cash cow’ venues rather than those that will have a long-term benefit for F1. As one of the world’s biggest automobile markets, and with a massive population – the majority of whom are under the age of 30 – India is a natural destination for F1. A representative of Liberty Media recently spoke at a conference held by a large investment bank where he spoke of the need to help promoters be successful when hosting an event rather than simply squeezing them dry for the race-hosting fee.
In addition to this, if Jaypee can reach out to representatives at Liberty Media, as well to the BJP, it is possible to restructure its current contract with the FOM and also reduce the bureaucratic hurdles in hosting a successful event.
An international event like the Indian GP could well be something that the BJP would be keen to see grow. It was an NDA ally after all, way back in 2003, who actively pursued the hosting of an Indian GP near Hyderabad. Bringing the event back, and helping to make it successful and sustainable, would be an achievement worth talking about.
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