Saturday, 05 Oct, 2024
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There is a huge commitment that the government has to undertake if the Indian Grand Prix is ever to return
A sport that has seen a rise in the Indian viewers significantly is Formula 1. As per a report released by Formula 1 in 2020 showed a fan base of 31 million people in India. Indian fans hold hopes that soon the Indian Grand Prix will return too. 2011-2013 saw three years of F1 in the Buddh International circuit. There is a huge commitment that the government has to undertake if the Indian Grand Prix is ever to return. Since the sport is reaching new heights of popularity in India and around the globe, it will be interesting to look into the ins and outs of the economics that goes into the sport.
The Formula 1 dynamics for almost the past one decade for all the teams have revolved around competing for Mercedes for the constructors’ championship and hoping to defeat Lewis Hamilton as the world champion. Almost every Grand Prix in these past few years has seen Lewis Hamilton and Valtteri Bottas together or alternating on the podiums, always ensuring a Mercedes up there. There was a slight twist in their constant reign when in 2021, Lewis Hamilton was defeated as the World Champion by Red Bull’s Max Verstappen, a win which was cherished by Formula 1 fans across the globe. Toto Wolff warned all teams after the last GP to beware for Lewis and Mercedes will show what they’re made of and in the hopes of doing so, Valtteri Bottas was replaced by the young George Russell after five years of his and Lewis Hamilton’s partnership.
Another angle that can be explored here is how the sport benefits the governments of the locations where the races take place. Among other factors pertaining to global standing, the spectators of F1 bring in heavy amounts of revenue in the form of tourism. As with all other industries in the world, F1 too suffered drastically due to the pandemic. Covid-19 impacted the timeline and most of all, the races were done without spectators. As a result, as per F1, there was a loss of $386 million.
In this season, the team that had been disappointing everyone for the past few years but is now shining in the LeClerc-Sainz pairing is Ferrari. Charles LeClerc took an almost unbelievable lead on the path to be the World Champion in the few initial races with his teammate being almost there quite a number of times. It was only after a few races that Red Bull came into form and Max Verstappen and Sergio Perez joined the race to be the World Champion. This change of pace must have led to significant losses of most bettors and the fantasy Formula 1 teams.
We are talking here about a sport where your win decides your budget. This is used majorly to develop the car, pay salaries to the entire team, and further R&D to develop a winning car. It is for this reason the most important thing in F1 is winning because you might not even have funds to sustain in the sport the subsequent year. In this sport, at times, money takes precedence over the skills of the driver because without money, you can’t have a car and if you don’t have a car, there isn’t much that you can do with a skilled driver. Hence, many times, drivers with the right connections have stayed in the sport while some really skilled ones have had to drop out unwillingly. Mercedes, alone, is known to spend around $450 million in 2020 and this budget lowers for every subsequent team as is based on the constructors' championship.
(Data by Essentially Sports)
The above chart is a clear representation of the difference between the best and the worst team in Formula 1. However, in 2021, a budget cap for $145 million was introduced which was lowered to $140 million this year. What this has essentially done is that it has narrowed the earlier gap of hundreds of million dollars to now, 10-20 million; it is thus an important step in creating a somewhat level playing field. Contrary to everyone’s expectations of seeing yet another battle between Lewis Hamilton and Max Verstappen, Mercedes’ performance has been extremely disappointing so far in the season and what’s even more shocking is that George Russel is outshining Lewis Hamilton extensively. For a team for which a podium was an everyday affair, this is a major shock. Due to the new technical rules, ground effect has returned back to F1 after a long time and this is where the team is struggling extensively. Additionally, teams which previously didn’t even imagine scoring points are performing consistently which is another thing nobody expected. Keeping in mind the new way things have been unfolding, every weekend fans try to stick to their loyalties while knowing that the season is not as predictable as the previous ones have been.
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