December 16, 2019

INTRODUCTION next two years, F-1 Indian grand prix lost

INTRODUCTION

India hosted 3 editions of F-1 Indian grand
prix at Budd International circuit in Uttar Pradesh. Event did not have so much
of a following other than the hype and noise that was created prior to the
event. The reasons for this could be due to many reasons such as the domination
of cricket among the people, lack of strong competition among the Indian
sports, inadequate sponsorship etc.

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However, the major reason for F-1’s absence in
the arena is due to the disputes that are hanging between Formula One World
Championship Ltd & the organisers of the event Jaypee Sports International
Ltd.

THE BACKGROUND

In 2007, when Jaypee group got the rights to hold the then by far the
best motorsport event in India, the hopes were very high which was planned to
be held on 2011.The event was a massive hit in the First year but then after
subsequently failing the next two years, F-1 Indian grand prix lost its’s plot
before completely going out of existence. Adding to the organiser’s misery, the
Indian grand prix comeback was given a hold after taxation dispute with the
government of India.

Jaypee Sports International Limited which is a part of the Jaypee group
got the rights to hold the event for the first time for mammoth 40 million USD.
They had the rights to promote the event as well. During the course, the JSPI
sold the rights to Beta Prema 2 which included Title and sponsorship deals, who
eventually then sold to Bharti Airtel.

THE DISPUTE

The major dispute that is prevailing at present is the one between the
Jaypee, Delhi government and Formula One world championship Ltd.

With respect to the time issue, the Supreme Court has ignored the fact
that the event only take place a number of 3days of the total 365 days and
instead were focussing on the contract agreement which was for 5 years.

JAYPEE GROUP

Initially, the Jaypee group had great plans to
increase their standards to higher levels starting of by entering in to buddh
international circuit and by hosting the Indian grand prix 2011, which was then
believed to be the biggest sporting event at the time in India.

Jaypee was in fact trying to bank on
increasing the prices of real estate in the areas nearby which was already
being acquired by Jayepee in developing the township. They though there would
be an increase in demand for cement and power if there were increase in demand
for housing as well. And hence, even during their tougher times during the
global economic downturn of 2008, they invested 315 million USD and 198 crores
for license for the first race. By 2013, the license fee had rose up to 250
crores through escalation clause and adding to that the Operational cost of
2011 was just 122 cores whereby 2013 it had rose above 300 crores.

Jaypee through the 1st editon in
2011 managed to recover only 150 crores which was attended by 96000 spectators.
The following years had a dip and rise in which brought 77 crores and 114
crores for the 2012 and 2013 years respectively with the 3rd
eventing bring a 66,000 spectators in total. The group had to eventually write
off a losses of 170 crores through having a total operating expenses of 274
crores, and hence were forced to go on a disinvesting spree through selling
their interest in cement & Power sectors.

And what that meant was that India’s
relationship with F-1 was put on hold with the organisers making it clear that
their return solely depends upon the tax issue.

THE FUTURE OF F-1 IN INDIA

Sports like kabaddi, badminton, tennis, hockey, football are trying to
their fullest to match the popularity that is being set by Cricket in India
through bringing in League’s that are sponsored by Corporate and Non- Corporate
companies. But in the case of motor sport racing, the fan base is a dynamic one
adding to the woes, the lack of a strong contender in the international arena.

The Federation of Motor Sports Clubs of India are also seen to be poor
in promoting the sport through national level events which could increase the
fan base that the sport currently has. And more over there has been little
interest among corporates to sponsor for motor sporting events as well. The
main issue being the perception the sport has among the corporates that it’s a
low potential sport in India. This lack of interests among cooperates for the
sponsorship of the events doesn’t do the FMSCI any good favour in organising
motor sport events as well as promoting the sport. The sport also might not
always provide back the incentives to sponsors and hence corporates always try
to stay in a safer place than promoting for such events.

This issue has to be addressed even though it isn’t an easy task to do
so. Incentivizing corporate sponsorship by including tax breaks could be one
way by which corporate sponsors could be attracted towards. Indian Government
is found to be one among the few grand prix hosting governments who are not
involved in the event. Indian government could rethink on entering given the
state of affairs and increase the reputation od the sport in India which is one
among the world’s most widely followed sport.

 

 

MARKETING F1 INDIAN GRAND PRIX

 

Jaypee Group had paid a ransom amount
of up to $400 million in order to make the Buddh International Circuit. In 2011
the Jaypee group made a remarkable history by staging the first ever F1 Indian
Grand Prix that India was waiting eagerly for. In 2011, a total of about 1 lakh
tickets were sold to the public whereas it wasn’t the same the following years.

 

The question is that if there was
enough promotions, advertising and marketing being made prior to event to host
it successfully in order to attract the advertisers?

 

The answer
is that, simply not much were done to promote the
event when it’s compared with cricket which is a religion in India. There are
lots of brands in case of cricket who wants to be a part of the event if in
case of say IPL but it’s not in the case of F-1 sadly but things may change in
the future but as of now this has been a major drawback even though Airtel spent
a lot of money for around Rs.34 crores for the event.

 

The fact is that in 2011, since
something like this was happening for the first time there were lot of
excitement around. People were so eager to experience the event for the first
time from different parts of the country. But in 2012, with the slowdown there
weren’t many people interested to the event. There were things that has to be
down with the cost too considering the airfares going up and people finding it
less affordable to make it to the event. Adding to the misery there weren’t any
global sponsors as such as well. Leaving alone Vodafone who were the sponsors
for the McLaren team there weren’t any global sponsors as such. So, Airtel had
a huge weight on their shoulders to conduct the event and if it wasn’t for
Airtel F-1 might have never happened too in India. Some of the international
brand s like Tag Heuer, Hugo Boss, UBS who were among the global sponsors
didn’t have much of a presence in India and hence an Indian Circuit did not did
not give them the satisfaction in a global perspective and hence Indian grand
prix had to rely on Airtel and Vodafone who were the major players in India.
More over F1 as a sport was something regarded as a European phenomenon which
was only starting to develop on to the other countries.

 

The
promotions which were seen in 2011 started to be missing in 2012 and 2013.
Advertisers had planned earlier and made the necessary arrangements for the
event way ahead earlier in 2011 and hence had advertising time both in print
ads and TV as well which was never seen in the following years. The blame could
not put onto Indian sponsors as F-1 had the sponsorship and media rights. This
also could be seen as a drawback as well for instance in IPL, BCCI is involved
in promoting the event but in F-1, they do not do any promotions particularly
in new circuits. If that had been done things might have had a change
considering India being a motorsport country having a lots amount of Motor
sport clubs and also considering the fact that that India is equipped with large
market of Automobile companies too. It was again surprising to not see
automobile companies like Renault who in fact is a sponsor of leading Team in
F-1 who supply Engines. 

 

Looking at
the ratings for the year 2010, F-1 had crossed 1+ ratings which in fact which
was high for any sport (not taking cricket into consideration here).Relating it
to football and F-1 in other countries where only a rating in the range of 0.2-
0.5 was seen per match and considering the demand of F-1 in India, it was always
likely to go down.

 

In case of
Social Media marketing, Red bull stood out from the rest in promoting their
team for better fan followers but rest of them were a bit quiet. Even though
most of the teams had huge social media outreach in Facebook and Twitter, they
could have done more to attract the urban youth.

 

The main
issue of ensuring the advertisers interested could have been made through the
teams getting involved themselves as well as the team sponsors. As it was seen,
other than Vodafone, there were absolutely no sponsors entering the fray. There
were minimal pride in the event which was being organised in India that had to
change.

 

 INTRODUCTION

India hosted 3 editions of F-1 Indian grand
prix at Budd International circuit in Uttar Pradesh. Event did not have so much
of a following other than the hype and noise that was created prior to the
event. The reasons for this could be due to many reasons such as the domination
of cricket among the people, lack of strong competition among the Indian
sports, inadequate sponsorship etc.

However, the major reason for F-1’s absence in
the arena is due to the disputes that are hanging between Formula One World
Championship Ltd & the organisers of the event Jaypee Sports International
Ltd.

THE BACKGROUND

In 2007, when Jaypee group got the rights to hold the then by far the
best motorsport event in India, the hopes were very high which was planned to
be held on 2011.The event was a massive hit in the First year but then after
subsequently failing the next two years, F-1 Indian grand prix lost its’s plot
before completely going out of existence. Adding to the organiser’s misery, the
Indian grand prix comeback was given a hold after taxation dispute with the
government of India.

Jaypee Sports International Limited which is a part of the Jaypee group
got the rights to hold the event for the first time for mammoth 40 million USD.
They had the rights to promote the event as well. During the course, the JSPI
sold the rights to Beta Prema 2 which included Title and sponsorship deals, who
eventually then sold to Bharti Airtel.

THE DISPUTE

The major dispute that is prevailing at present is the one between the
Jaypee, Delhi government and Formula One world championship Ltd.

With respect to the time issue, the Supreme Court has ignored the fact
that the event only take place a number of 3days of the total 365 days and
instead were focussing on the contract agreement which was for 5 years.

JAYPEE GROUP

Initially, the Jaypee group had great plans to
increase their standards to higher levels starting of by entering in to buddh
international circuit and by hosting the Indian grand prix 2011, which was then
believed to be the biggest sporting event at the time in India.

Jaypee was in fact trying to bank on
increasing the prices of real estate in the areas nearby which was already
being acquired by Jayepee in developing the township. They though there would
be an increase in demand for cement and power if there were increase in demand
for housing as well. And hence, even during their tougher times during the
global economic downturn of 2008, they invested 315 million USD and 198 crores
for license for the first race. By 2013, the license fee had rose up to 250
crores through escalation clause and adding to that the Operational cost of
2011 was just 122 cores whereby 2013 it had rose above 300 crores.

Jaypee through the 1st editon in
2011 managed to recover only 150 crores which was attended by 96000 spectators.
The following years had a dip and rise in which brought 77 crores and 114
crores for the 2012 and 2013 years respectively with the 3rd
eventing bring a 66,000 spectators in total. The group had to eventually write
off a losses of 170 crores through having a total operating expenses of 274
crores, and hence were forced to go on a disinvesting spree through selling
their interest in cement & Power sectors.

And what that meant was that India’s
relationship with F-1 was put on hold with the organisers making it clear that
their return solely depends upon the tax issue.

THE FUTURE OF F-1 IN INDIA

Sports like kabaddi, badminton, tennis, hockey, football are trying to
their fullest to match the popularity that is being set by Cricket in India
through bringing in League’s that are sponsored by Corporate and Non- Corporate
companies. But in the case of motor sport racing, the fan base is a dynamic one
adding to the woes, the lack of a strong contender in the international arena.

The Federation of Motor Sports Clubs of India are also seen to be poor
in promoting the sport through national level events which could increase the
fan base that the sport currently has. And more over there has been little
interest among corporates to sponsor for motor sporting events as well. The
main issue being the perception the sport has among the corporates that it’s a
low potential sport in India. This lack of interests among cooperates for the
sponsorship of the events doesn’t do the FMSCI any good favour in organising
motor sport events as well as promoting the sport. The sport also might not
always provide back the incentives to sponsors and hence corporates always try
to stay in a safer place than promoting for such events.

This issue has to be addressed even though it isn’t an easy task to do
so. Incentivizing corporate sponsorship by including tax breaks could be one
way by which corporate sponsors could be attracted towards. Indian Government
is found to be one among the few grand prix hosting governments who are not
involved in the event. Indian government could rethink on entering given the
state of affairs and increase the reputation od the sport in India which is one
among the world’s most widely followed sport.

 

 

MARKETING F1 INDIAN GRAND PRIX

 

Jaypee Group had paid a ransom amount
of up to $400 million in order to make the Buddh International Circuit. In 2011
the Jaypee group made a remarkable history by staging the first ever F1 Indian
Grand Prix that India was waiting eagerly for. In 2011, a total of about 1 lakh
tickets were sold to the public whereas it wasn’t the same the following years.

 

The question is that if there was
enough promotions, advertising and marketing being made prior to event to host
it successfully in order to attract the advertisers?

 

The answer
is that, simply not much were done to promote the
event when it’s compared with cricket which is a religion in India. There are
lots of brands in case of cricket who wants to be a part of the event if in
case of say IPL but it’s not in the case of F-1 sadly but things may change in
the future but as of now this has been a major drawback even though Airtel spent
a lot of money for around Rs.34 crores for the event.

 

The fact is that in 2011, since
something like this was happening for the first time there were lot of
excitement around. People were so eager to experience the event for the first
time from different parts of the country. But in 2012, with the slowdown there
weren’t many people interested to the event. There were things that has to be
down with the cost too considering the airfares going up and people finding it
less affordable to make it to the event. Adding to the misery there weren’t any
global sponsors as such as well. Leaving alone Vodafone who were the sponsors
for the McLaren team there weren’t any global sponsors as such. So, Airtel had
a huge weight on their shoulders to conduct the event and if it wasn’t for
Airtel F-1 might have never happened too in India. Some of the international
brand s like Tag Heuer, Hugo Boss, UBS who were among the global sponsors
didn’t have much of a presence in India and hence an Indian Circuit did not did
not give them the satisfaction in a global perspective and hence Indian grand
prix had to rely on Airtel and Vodafone who were the major players in India.
More over F1 as a sport was something regarded as a European phenomenon which
was only starting to develop on to the other countries.

 

The
promotions which were seen in 2011 started to be missing in 2012 and 2013.
Advertisers had planned earlier and made the necessary arrangements for the
event way ahead earlier in 2011 and hence had advertising time both in print
ads and TV as well which was never seen in the following years. The blame could
not put onto Indian sponsors as F-1 had the sponsorship and media rights. This
also could be seen as a drawback as well for instance in IPL, BCCI is involved
in promoting the event but in F-1, they do not do any promotions particularly
in new circuits. If that had been done things might have had a change
considering India being a motorsport country having a lots amount of Motor
sport clubs and also considering the fact that that India is equipped with large
market of Automobile companies too. It was again surprising to not see
automobile companies like Renault who in fact is a sponsor of leading Team in
F-1 who supply Engines. 

 

Looking at
the ratings for the year 2010, F-1 had crossed 1+ ratings which in fact which
was high for any sport (not taking cricket into consideration here).Relating it
to football and F-1 in other countries where only a rating in the range of 0.2-
0.5 was seen per match and considering the demand of F-1 in India, it was always
likely to go down.

 

In case of
Social Media marketing, Red bull stood out from the rest in promoting their
team for better fan followers but rest of them were a bit quiet. Even though
most of the teams had huge social media outreach in Facebook and Twitter, they
could have done more to attract the urban youth.

 

The main
issue of ensuring the advertisers interested could have been made through the
teams getting involved themselves as well as the team sponsors. As it was seen,
other than Vodafone, there were absolutely no sponsors entering the fray. There
were minimal pride in the event which was being organised in India that had to
change.

 

 

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