A second season of the indigenous X1 Racing League, despite the setback of a global pandemic, offers a rosy picture of motor sports’ future in India. If Racing Promotions Pvt. Ltd. are able to hold the next season at end of this year, as they hope, it would be a feisty comeback after a stuttering start.
When the league was announced formally in October 2019 — and held in November-December — there were a number of reasons to feel optimistic about this new sports business. The league was conceptualised by two racers, Aditya Patel and Armaan Ebrahim. It had Abhinandan Balasubramanian, who co-founded the Premier Futsal, as its business and operations head. Its financial backers included Dabur India vice-chairman Mohit Burman, Cred founder Kunal Shah and investment firm White Unicorn Ventures, among others. India’s first Formula One driver Narain Karthikeyan took the Chennai team, while Abu Dhabi royalty, Sheikh Tahnoon Bin Saeed Bin Tahnoon Al Nahyan, bought Delhi.
But there were starting troubles as well that lasted through the races. While the league was first announced (in mid-2018) with the intention of having street races and eight teams in competition, the concept fell apart early on under the weight of permissions, administrative hassles and prohibitive costs. The number of teams dwindled to six by the time the league took place.
Racing Promotions faced problems common to sports leagues in India: defaulting payments and non-payments of dues, besides being accused of not paying a broadcast production company — which they claim to have sorted. Racing Promotions also face a trademark challenge to the use of X1 Racing, which is currently being contested.
Their biggest setback were the race cars themselves.
Initially meant to be developed in Europe, the car was supposed to be an X1 prototype. But the cars to hit the race track were decade-old Formula BMW cars, with several drivers facing issues with the machines. Logistical hurdles meant that the cars didn’t reach Chennai from Delhi on time, and a race that was scheduled for a Saturday had to be cancelled and packed into the next day’s events.
But sportspeople are good at taking a knock, brushing it off and getting back into business. Balasubramanian admits to certain misjudgements and that they have to upgrade their cars in the future. They are now aiming to bring in a new set of cars — powerful, 280BHP, top-of-the-line ones to be owned by the league and not leased as was the case earlier. Racing Promotions is also in talks to host a Formula 3 race in India.
There has also been some restructuring of the business, with new partners in the game, to offset previous setbacks. Racing Promotions has scored a return on capital for their first round of investors — during a pandemic. Rohit Chokhani of White Unicorn Ventures, whose share was in ‘double digits’, sold it for a 25 percent internal rate of return. They were bought out by an investor with a greater interest in promoting the league, deeper pockets and ability to back the league for at least three years.
One of the X1 Racing League teams, Mumbai Falcons, entered the ongoing F3 Asian Championships, with Jehan Daruvala and Kush Maini, who finished the 2020 British F3 Championships in second place, as its drivers. Daruvala ended third in the FIA Formula 3 Championships 2019 and was the first Indian to win a Formula 2 race, in Bahrain in December 2020.
Organisers claim that the first season of the league had a reach of 188.7 million (including television, over-the-top platforms, digital, marketing footprints), and its viewership surpassed that of the more established Formula E. Their revenue, on an initial investment of $1million, came to a little under $2 million, says Balasubramanian. The team franchises, most of them, have stayed committed to the investment of $8-10 million over a period of 10 years, even though the promise of breaking even comes only in the fifth year.
The sport in general has a long gestation period. It is reason why Burman said at the time of the launch that they were looking at 7-10-year return-on-investment period. He added that integrating e-sports makes this a differentiator, and as a venture this is high-risk, high-returns, so they will look at a venture-like returns.
A second season of the league will break the perception the organisers gave of overpromising and underdelivering. It will also retain faith in sports businesses— besides the Indian Premier League—surviving the virus and surviving outside of cricket.
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