Is India really ready for F1?

Back in 2003, when N. Chandrababu Naidu pitched the idea of hosting a Formula One Race in Hyderabad, he had already gauged the opportunities that an event on such a large scale would generate. He had already inspected a few European race tracks and had done his homework before he actually presented it to Bernie Ecclestone at the time of his visit to the Afro Asian games. His aspirations were, however, put to rest after the new chief minister asserted that the state had other much more serious concerns to address than to spend a fortune over worthless eccentricities. That was June 2004.

There had been many plans to shift the proposed track to many cities, but finally, in September 2007, it was announced that the inaugural race would take place at the Buddh International Circuit in Greater Noida in 2010, which was later postponed to 2011 citing time considerations by Bernie Ecclestone. The 5 year contract was awarded to Jaypee Associates to build the track which was to cost a whopping US $309 million.

With such a huge investment in the foray, opportunities were many. While corporate lobbyists lined up outside familiar government buildings, there was genuine employment being created at the same time. It was estimated that the project could generate $170 million in revenues and bring employment to 10,000 people. Telecom major Airtel signed an INR 34 crores sponsorship deal to sponsor the event from 2011 to 2016.

I had the splendid opportunity to be a spectator to the inaugural race held from 28^th to 30^th October 2011 at the 875 acres sprawling circuit in Greater Noida. The circuit is quite far from actual civilisation and the only way to get there was with your personal transportation. In spite of this, it was hearty to see the numbers in which the crowd had turned up.

My ticket had cost me INR 6500 which had bought me a reasonably comfortable seat even without any shade on top. The promotional activity around the place was visible very clearly, although the limited number of participants was also palpable. Sports merchandise at high premiums were on sale wherever you looked. The atmosphere was charged up owing to the roaring of the V8s in the vicinity. My friend, who, to my knowledge, had never really been an F1 fan, was the one who who convinced me to go for the higher INR 6500 than the cheaper ones, as well as buying an original Ferrari flag which he proudly pasted across his chest!

And all the while, he was probably (read as definitely) not even very interested in the intricacies of the actual race. The kind of engagement that was being created through ideas like simulating the driving experience of an actual F1 driver for racing enthusiasts was something that was very new to the traditional sports marketing ethos.

Till then, the annually held Auto Expo had been the only commercial and professional level showcase for the Automobile Industry in India. The Formula One spectacle was a more glamorous and media heavy alternative. The tickets were priced from INR 2500 to INR 35000 for Grand Stand seats. The total number for the audience was estimated to be 95000. With 25% of seats reserved for Government officials (a mandatory practice in India), the revenues generated were still respectable.

Cut to July 2013: it was announced that the Indian Grand Prix stood cancelled for 2014 and was to return in 2015. The reason cited was that FIA wanted the Indian race to be scheduled in the first half of the year but initially ceded to the demands of the Federation of Motor Sport Council of India. The reason for keeping the race near Diwali was the increased spending of people, especially in the northern belt of the country. But keeping the packed Formula One race calendar in mind, the race has been formally cancelled in 2014 and is scheduled to be back in the early part of 2015.

While this seems like a very plausible explanation for the cancelling of the race, the losses that will be incurred by the organisers will be huge. The crowds that turned up for the second race in 2012 were far lesser as compared to the inaugural race. The numbers had come down to 65,000 from 95,000. This has prompted the organizers to heavily cut down on ticket prices to try and bring in more crowds.

Let us try and analyse the reasons why the interest of the audience and hence revenue generated through ticket sales has waned so drastically. Motorsport as a spectator sport in India is still a very niche offering in India. The first time news came up in mainstream media about a possible F1 race, the audience was made to believe that a F1 race was not just motorsport but something much more.

True as it is, it drew the high and mighty of Delhi-NCR and neighboring areas. The event was a four day extravaganza with Metallica set to inaugurate the festivities with a concert in Gurgaon on Oct 27^th, which would be followed by the practice sessions, qualifying and then the race on Sunday the Oct 30^th. Lady Gaga was scheduled to perform in the after party. The whole buzz around the event was so well crafted that it felt as if though you were socially irrelevant if you were not a part of it.

The result was that a lot of people actually turned up who were doing it just for the heck of the experience and had no actual interest in the sport. A more prudent approach on the part of the governing body of Motorsports in India would have been to steadily grow a fan base in India which would have meant a sustainable future for the event in India.

The marketing activity surrounding the F1 race has a lot to learn from the model that IPL follows. As far as the level of the sport goes, it is of the highest order. So, even though the mega event has been marred by scandals and other unfortunate events, the revenue generated from promotional events, sponsorship deals and telecast rights has still been very high. The number of brands that get endorsed at the time of IPL through the TV spots in contention have been wickedly contested. IPL has been the ‘Super Bowl’ of India.

The lukewarm response that the Champions League is getting after the IPL frenzy is over is a sign that slowly but steadily the “cricket is a sure formula for success” belief has to change. People are finding new avenues and new heroes to latch on to. The recently concluded Indian Badminton league and the interest it generated, at least in the youth, presented a heartening prospect. The sponsors, consequently, lined up and the number is expected to go only one way.

Racing in the United States has always been about NASCAR and Monster Trucks. So, after the fiasco in Indianapolis in 2005, where only Ferrari, Jordan and Minardi took to track with an issue with the Michelin tires, it made sense to can the race and get it off the F1 calendar. But the money making opportunity that a race is, the F1 calendar had one planned in Austin, Texas, again in 2012.

Although hosting it in NJ next year as planned before will not happen in most probability, to get an audience already receptive to racing back on the F1 bandwagon would still have been much easier than a generation not into racing at all. So as tickets sell on at Cafe Coffee Day outlets in Delhi, Formula One as a sport has a long way to go and a lot to learn before it can actually serve as a long term prospect in India. The mantra is to get them hooked to the sport first. The money will follow.