Despite its recent announcement of plans for expansion into the United States market in the next two years, Powerboat P1 is pulling the plug on its 2010 season. Below is a statement by Asif Rangoonwalla, the chairman of Powerboat P1, taken from the organization’s web site.
Statement From Asif Rangoonwalla
Following seven years of investment totalling almost €30m, Powerboat P1 Management has, like any investor, taken a very careful look at the return on investment which is being generated from the championship.
After much deliberation and discussion, we have concluded that the current business model was not only flawed to start with, but is unsustainable even in the short term and in the best interests of the company, the championship and the sport we have decided to develop and implement a new business model. This decision obviously has implications for the teams represented here today as well as those which are not in attendance. I will deal with this in more detail later in the statement.
What is it that makes the business unsustainable? As many of you know, unlike traditional motorsport, powerboating does not enjoy any significant revenue from ticketing or television rights. Added to this is the fact that sponsorship income is very limited for what is very much a niche sport.
We knew this when Powerboat P1 launched in 2003 but we felt it would be possible to overcome these challenges. On reflection, perhaps we were wrong in this assumption as it is proving increasingly challenging for us to obtain the necessary support for the Championship in its current form.
There is another important factor to consider and that is what can best be described in economic terms as a “lack of demand” for the product in its current form. By this I mean a lack of demand from leading venues, from mainstream broadcasters and from commercial partners. This applies not only to P1 but to powerboating as a whole and urgently needs to be addressed if the sport is to prosper and reach the level we all believe it can attain.
Furthermore, over the years whilst Powerboat P1 has been aware of the various shortcomings of the promoters and the teams it has continued to subsidise the costs of the events at great expense. Had the various stakeholders in the sport been more professional, in particular the promoters and venues, I believe the overall investment since 2003 would have delivered far better returns and been far more successful in building the sport. After having invested so much money only to find that the stakeholders are still not at the right level leaves me with little alternative but to consider a new strategy for the future to ensure the long-term success and viability of both the sport and the Championship as a whole.
We have shared our thoughts in considerable detail with the sport’s governing body, the UIM, who are supportive of our intentions. At this point in time I can confirm that Powerboat P1 are in discussion with the UIM to assess the viability of the international federation, under its direct sanction, staging a series of offshore endurance races for a period of two years by working in conjunction with the national federations in various countries. We feel it is important that the teams who had planned to enter the 2010 season are given every opportunity to race and these events would be run under the 2010 Pleasure Navigation Rules.
I feel that this window is needed for Powerboat P1 Management to take the necessary steps to lay improved foundations and rebuild the business. The UIM understands that Powerboat P1 must effectively take a step back before it can move forward and deliver a platform and a sport which has:
· A compelling value proposition for sponsors and commercial partners
· A truly global footprint in key markets
· Professional and committed teams
· Mainstream venues (capital cities)
· The engagement and commitment of the marine industry
· Valuable economies of scale
· Compelling media content that is of interest to mainstream broadcasters
This is not a decision which has been taken lightly. The implications for the Championship are wide-ranging and significant in nature. It has only been possible to reach the conclusions set out in this statement in the last week as we have been thoroughly exploring every possibility of staging the 2010 season despite increasingly overwhelming odds.
I expect you are wondering about the possibility of Powerboat P1 staging just a couple of events, with the balance of five races being made up through national events such as those from the IPS or another national federation. The implications of staging a season in this way with contracted suppliers makes it very complicated, there is a lack of consistency in delivery and there is still a significant cost consideration, in particular the costs of the television coverage, timekeeping, race management and safety, as well as logistics.
I should stress that Powerboat P1 remains fully committed to the Championship and this commitment has been demonstrated by the substantial financial investment, by both myself as an individual and through the management team over the past seven years to uphold and preserve the integrity of the Championship.
Powerboat P1 Management remains focused on the development of the sport of powerboat racing under the auspices of the UIM and, in particular, at a grassroots level and it is here that we will be focusing much of our attention in the months ahead. The sport is in desperate need of ground-up development whereas the P1 model has been top-down since inception. I use the analogy of “staging Wimbledon without any qualifying tournaments or support events.”
Within weeks we intend to announce the launch of our much-anticipated marine motorsport platform with several key elements, including:
•The global roll-out of the P1 SuperStock Championship in 5 – 7 new markets in 2011
•The acquisition of the Aquabike World Championship
•The development of a new RIB World Championship
We see Aquabike and SuperStock as providing the foundation for our marine motorsport platform and believe these classes will sustain the sport, making it more appealing to participants, spectators, promoters and commercial partners alike. Rest assured that as demand for the Supersport and Evolution products improve, we fully intend to re-integrate the series into the P1 platform, from 2012 or earlier if viable.
We will also be working closely with the UIM to develop its Formula Future initiative and we are continuing with our plans for P1 in North America where commercial opportunities, team numbers and venues are more readily available.
Undoubtedly you will be disappointed with this news as I know most of you have worked extremely hard over the winter to prepare for the 2010 season. I stress again that this was not a decision taken lightly.
My team and I are firmly committed to developing the sport at all levels and I genuinely believe that the abovementioned steps are necessary at this point in time if powerboating is to prosper and enjoy a future that is commercially sound, with professional teams and a broad base of appropriate stakeholders