New Delhi: Indian Grand Prix organisers 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 organisers struggle, including South Korea which is trying to renegotiate its Formula One contract just a year after its debut.
Jaypee spent $200 million building 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 organisations 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 (1,000-hectare) 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. That’s how we intend to recover the money,” he said.
Winner Red Bull driver Sebastian Vettel of Germany, second from right, poses with Ferrari driver Fernando Alonso of Spain, right, third place, Red Bul chief technical officer Adrian Newey and McLaren Mercedes driver Jenson Button of Britain, second place, celebrate on the podium after the Indian FormulaOne Grand Prix at the Buddh International Circuit. AP
Several grand prix organisers 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 baulked 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 South 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 (FMSCI), said Jaypee would not have the same problem.
“The organisers and promoters have taken it as an investment, they’re using it as their ground to globalise their image,” Chandhok said.
“They’re a very large infrastructure company, they build apartments, they build hydropower, 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.
“It’s a very good business model. They’re not looking at the event to make money, because everyone knows no Formula One event makes money.”
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 South Korean government, 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.”
Organisers were forced to slash ticket prices to attract visitors to the purpose-built circuit, which is about 40 kilometres (25 miles) from New Delhi.
The 120,000-capacity venue was less than half-full for Saturday’s qualifiers and 95,000 fans — 79 percent of the maximum -- attended on Sunday’s race day.
Zaidi said Jaypee would open talks with MotoGP, which has 18 stops on its 2012 calendar, and was “quite hopeful that this thing will come through”.