Discussions over Tea (Of course, cutting maar ke)

Wednesday, February 11, 2004

SPORT : Just a pipe dream?

It's only fair that a sport like Formula 1 undergoes change at the rate at which it's played. And F1 is set for a huge change in the coming few years.

There are two reasons for that.

Traditionally, F1 has been concentrated in the European nations. With the exception of Kuala Lumpur, Australia, Brazil and the two North America races, all the remaining 11-12 races are held in Europe. Where the weather plays an important role in tyre manufacturing and reliability engineering.
In the coming years, the F1 circuit is moving to places like India (Mah/AP), Bahrain and China where the weather conditions will be drastically different from those prevalent at the Euro GPs. This would challenge the car manufacturers to innovate and that too quickly to adapt to the variations in car setup and other manufacturing testing for upcoming seasons.

Secondly, F1 cars get a lot of their revenues from the advertising from tobacco companies. BAT (British American Tobacco) is the part sponsor of the BAR team. Benson & Hedges, Marlboro, Imperial Tobacco, Japan Tobacco are other sponsors for F1 cars. Simply put, they're willing to pay more because of the restrictions on tobacco advertising in other media forms. So with the large television coverage for F1 and it's large fan following, the sport becomes an indirect advertising media. But with more pressure coming in from non-tobacco companies who're uncomfortable being allied with the tobacco companies, F1 cars are being forced to cut down on the revenue streams from tobacco companies. The FIA took a large step against this by cutting the Canadian GP from it's 2004 calendar. Predominantly because Canada passed a regulation banning tobacco advertising.

And that's where the danger lies for India. Last week India became the eight nation in the world to ratify the World Health Organization's Framework Convention on Tobacco Control (FCTC). And the convention becomes international law as soon as the 40th country ratifies it. The law goes into effect in April/May before which there will be large "lobbying" on behalf of tobacco companies who will ride F1 discussions between the AP state government and the Maharashtra state government to postpone the ban or find a workaround about it. The bigger risk is of the negotiations collapsing a la the Canadian GP. But that's a worst case scenario with India being too lucrative a new market in terms of both TV coverage and reach to make such a drastic move.

End of Post

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