The Indian Grand Prix (GP) has been hit by a troubled economy and sliding rupee, Government apathy towards the sport, a lop-sided financial arrangement and the lack of a local driver. Promoters typically pay Formula One (F1) supremo Bernie Ecclestone a hosting fee of between $20-50 million a year for the privilege of hosting a Formula One race, with the amount escalating by 10 per cent every year, and with the rupee in freefall and the fees having to be paid in dollars, the cost burden of hosting the event has increased. About $1.6 million is also paid to the Indian Government for permission to hold the race. With all advertising and merchandising revenue also going to F1, the only source of income for the promoters is from the sale of tickets, which has dropped markedly.
With the 2014 edition already being dropped for “logistical” reasons, it remains uncertain whether the race will return to the Buddh International Circuit (BIC ) in Greater Noida in Uttar Pradesh in 2015. Indian Grand Prix organisers say they’re determined to keep their Formula One status as fears mount that October’s recent race could be the last to be hosted in the country. With India missing from the 2014 schedule due to what promoters call “logistical” reasons, it remains uncertain whether the race will return to the $450 million Buddh International Circuit on the outskirts of New Delhi. Formula One supremo Bernie Ecclestone has said that India, which hosted its third race recently, will be back in early 2015 as he rejigs a packed calendar.
Vicky Chandhok, who heads the Federation of Motor Sports Clubs of India is hopeful. “With venues in other countries also fighting for slots, we can’t afford to miss out in 2015,” Chandhok, father of racing driver Karun said. “But I am optimistic that the promoters will work out an agreement with Formula One to have two more races. We have a great facility here.” Ecclestone was quoted as saying in July that “political” matters caused India to miss out next year, but the event’s promoters were confident they will see out their five-race contract.
“If the Indian GP is not being held in 2014 it is entirely for logistical reasons,” said Sameer Gaur, CEO of privately owned Jaypee Sports International Limited (JPSI). “They wanted us to hold the race in March, but it was not practical to host one now and another in six months. But there should be no doubt that we will be back in 2015.”
The Indian GP has been hit by a troubled economy and sliding rupee, Government apathy towards the sport, a lop-sided financial arrangement and the lack of a local driver. The promoters pay about $40-45 million to Formula One every year as a licensing fee and about $1.6 million to the Indian Government for permission to hold the race. With all advertising and merchandising revenue also going to F1, the only source of income for the promoters is from the sale of tickets, which has dropped markedly. The inaugural race in 2011 drew some 95,000 spectators to the 100,000-capacity circuit, but the numbers fell to around 65,000 last year. Sluggish ticket sales this year could see figures drop further.
In another financial hit, the Government’s refusal to recognise Formula One as a sport means the organisers need to pay tax and duties on everything connected with the race. And recently in October the State Government of Uttar Pradesh, where the circuit is located, slapped entertainment tax on each ticket, effective from this year onwards. With the odds stacked against the race’s private backers, who built the circuit from scratch as part of a major property development, observers are pessimistic. “If we get another race, it will be by default, not by design,” seasoned motorsports writer Harish Samtani said. “But I am not optimistic. F1 is not meant for this country. “F1 is not sustainable here. Our people don’t understand what is essentially a niche sport. Besides, high costs are involved and money is at a premium everywhere in the world, more so in India.”
India Will Take 10 More Years To Learn Racing: Adrian Sutil
Adrian Sutil from Force India said it was important that Indian GP remains in the F1 calender if motorsport has to grow in the country…
“Racing is not big here. It needs time. When I look back at 30s in Europe, people used to buy cars and start racing. We have a long history, that’s why we are here where we are…. technologically advanced. In India, it has just started and needs at least 10 years or 20 years to make an impact and it has potential. “It’s all about coming here every year consistently and people will pick it up. People will get more interested. If Europe can achieve it, India can too,” Sutil said.
Formula One Needs India, Says Mclaren’s Perez
The customs and tax issues notwithstanding, the organisers of the Indian GP, Jaypee Sports nternational, have a five-year contract and the race is on the provisional 2015 calendar. Whether the race will return to India, is another question.
The Indian GP was taken off the 2014 calendar as it did not make sense to host the race in late 2014 and early 2015, when it is scheduled to return to the Buddh International Circuit ( BIC ). McLaren driver Sergio Perez believes that Formula One is getting highly popular in India. He says the sport certainly “needs India” and hopes the race returns in 2015 after giving the next season a miss. “It is a shame that the Indian Grand Prix is not happening in India next year. I think Formula One needs India and it is getting more and more popular every time we come here. I really hope we can come back,” Perez said in an interview. The Indian GP was taken off the 2014 calendar as it did not make sense to host the race in late 2014 and early 2015, when the Grand Prix is scheduled to return to the Buddh International Circuit (BIC). “The interest is growing in India. More and more people are taking notice, so it is getting better. It will be good if we can keep the race from 2015,” added the 23-year-old.
The customs and tax issues notwithstanding, the organisers of the Indian GP, Jaypee Sports International, have a five-year contract and the race is on the provisional 2015 calendar. Whether the race will return to India, is another question. “India is a difficult place to get in, to get out, to get things and to get any updates during the weekend. It’s got more to do with that kind of stuff than anything else. Otherwise we all enjoy coming to India. It is a great country and it is a place which we will miss next year. About 2015? Well you never really know in Formula 1.”