Indian GP sees limited F1 profits in different lightNEW DELHI - Indian Grand Prix organizers said they hoped to break even within four years and were talking to MotoGP and other race series in a bid to make up for their limited profits from Formula One.
The private Jaypee infrastructure group revealed the plans as other grand prix organizers struggle, including Korea, which is trying to renegotiate its Formula One contract just a year after its debut.
Jaypee spent $200 million building the Buddh International Circuit and another $200 million on their Formula One licence fee, spokesman Askari Zaidi told AFP.
He said the Formula One profits were confined largely to ticket sales as revenues from sponsorship and broadcast rights were controlled by the sport.
But the company will also profit from building and selling houses and commercial space on a large new development around the track, known as Jaypee Greens Sports City.
“In Formula One, there’s not much scope to make money barring the sale of tickets but there are other races which we’re planning to hold, like MotoGP, and some other race organizations have contacted us,” Zaidi said on Monday. “So whatever we spend we hope to recover in four years.”
Zaidi said Jaypee’s agreement with the government was to fill 35 percent of the 2,500-acre site near New Delhi with sports facilities including a 100,000-seat cricket stadium, a golf course and a shooting range.
“The rest we can develop and sell as commercial space or houses,” he said. “That’s how we intend to recover the money.”
Several grand prix organizers have wrestled with the dilemma of Formula One, which is known to boost prestige but at a high cost.
China and Australia are among those who have balked at the outlay while Singapore is yet to sign a new contract, and France and Turkey have both dropped off the Formula One calendar.
Formula One boss Bernie Ecclestone this weekend flatly rejected Korea’s request for a cheaper contract, saying there were “lots of things in life you can’t afford, and you don’t have to have them.”
But Vicky Chandhok, president of the Federation of Motor Sports Clubs in India, said Jaypee would not have the same problem.
“The organizers and promoters have taken it as an investment, they’re using it as their ground to globalize their image,” Chandhok said.
“They’re a very large infrastructure company, they build apartments, they build hydropower [facilities], they build golf courses. They will now, on the back of this, be able to sell their apartments and golf club memberships better. They’re using it as a marketing tool. So the event loss is of no consequence.”
Chandhok, who was a key figure behind the project, said other grands prix had run into trouble because they were publicly funded.
“Those are government run. The ups and downs of the governments and the changes of political scene will not affect us. This is private,” Chandhok said.
“There, it’s the Korean government, and they feel they can’t afford it any more. So this is the advantage of having a private company running it. We will not suffer the consequences or vagaries of political will.”