The man who jump-started electric motorcycle racing believes a new form of motor sport requires a new form of governance, so he’s created a cooperative where teams racing in the TTXGP help make the rules, settle the disputes and share in the profits.
Azhar Hussain’s approach stands in stark contrast to the centralized structure of most motor sports, where a governing body calls the tune the teams dance to. To that end, he announced today the creation of Trust.eGrandPrix.Org, a “co-operative union” where teams share in the ownership and running of the TTXGP electric motorcycle grand prix.
“This is a big Control-Alt-Delete for motorsports,” Hussain says. “It’s a reboot. We’re giving teams control. This binds everyone together on a common trajectory and it gives everyone a piece of the action they’re generating.”
Hussain argues a nascent sport driven by rapidly changing technology cannot be constrained by rigid rules handed down from on high. He didn’t name names, but it’s clear he’s talking about the Fédération Internationale de Motocyclisme, the international sanctioning body of MotoGP and other races. Hussain had been working with the FIM to bring the TTXGP under its umbrella until last fall, when the FIM unilaterally launched its own electric races, the ePower International Series.
“Racing organizations are effectively cartels and empires,” Hussain says. “We need to reboot what it is to be a racing organization. It is open, it is transparent and it is democratic.”
The TEO, as Trust.eGrandPrix.Org is called, is open to all teams who race in the TTXGP series, which so far includes 12 races in four countries and a grand championship finale slated for Albacete, Spain in October. Teams automatically are a part of the TEO. They earn shares in TTXGP Limited, the commercial rights owner of the race series, based upon how many races they run, how many bikes they enter and how many seasons they compete. The shares cannot be bought or traded, only earned by suiting up.
“We call it race to own,” Hussain says.
At this point Hussain and a handful of investors pretty much own TTXGP Limited. Thirty percent of the equity will be transferred to the teams by the end of this year. The teams will slowly earn a majority stake in the operation, which is legally required by the terms of its incorporation to cede at least 70 percent equity to the teams by 2020 — assuming, of course, the TTXGP is still around. We won’t bore you with the details, but there’s a vesting process and a formula by which teams start losing shares if they stop racing. Go three years without competing and you’re out.
Regardless of how much equity the teams hold in TTXGP Limited, they will control three of five seats on the corporation’s board of governance. Those seats will be filled by open ballot every two years and no one person could serve more than two terms. In addition to helping draft the rules — based upon the TTXGP Technical Rules Wiki — the governing board will appoint the five members of the board of arbitration, which will settle any disputes that arise between teams.
Beyond giving the teams a say in making the rules and settling the disputes, the TEO entitles them to a share of the profits — if and when there are any.
“We’re unlikely to make a profit in 2010,” Hussain says. “But the teams are buying in for the long-term. Next year we’ll see some cash flow coming back.”
From what? The same stuff MotoGP, Formula 1 and everyone else makes money on — ticket sales, merchandising and television rights. Yes, television rights. Hussain says some of the races on this year’s calendar will be televised, and he expects an audience of 250,000 viewers this year. Not many, no, but Hussain sees big things ahead.
“We think that within 10 years this can be a multi-billion dollar endeavor,” he says. “We are accelerating that quickly.”
He’s completely serious. It would be easy to discount that as wishful, if not delusional, thinking, but it’s worth noting Hussain launched the TTXGP with one race on the Isle of Man last year. Not one year later he’s got 13 motorcycle races and an electric car race on the calendar. Clearly there’s no knowing how big, or how fast, this nascent sport will grow.
Although Hussain wants to create a democratic model for governing this new sport, there’s a measure of self-preservation involved. The TTXGP is in its infancy, and it’s standing against the FIM and the Isle of Man, which recently split with Hussain and announced it would launch its own race, the TT Zero. That’s like bringing a a nail file to a gunfight. In an effort to bolster its strength, the TTXGP will award additional shares — and therefore profits — to teams that race only in the TTXGP.
“This year we will beat the FIM,” Hussain says. “But the FIM is an incredibly powerful empire.”
It remains to be seen how many teams will commit to the TTXGP. Hussain says 55 have registered — most of them from the United States, with the rest from China, India and Europe — but no one’s ponied up the registration fee. They’ve got until March 29 if they’re competing in the U.S. races and April 30 if they’re running anywhere else.
It’s a radical idea, and even Hussain isn’t sure it will work.
“I have no idea,” he said. “But I think it’s more important to give it a go. I think it absolutely will work if people get behind it. Cooperatives are a proven model, and they work.”
We’ll see.
Photo of electric motorcycles at the TTXGP in June: Pew! Pew! Pew! Lasers! / Flickr
