F1’s showpiece grand prix in the U.S. "is in danger of folding as the money runs out," according to Kevin Eason of the LONDON TIMES. The Circuit of the Americas, which hosts the U.S. Grand Prix, "is now facing the loss of state grants that were vital to balance the books." Race Founder and COTA Chair Bobby Epstein "candidly admitted" to his local newspaper in Austin: “To use a technical term, I think we’re screwed.” Despite massive crowds, finances "were always precarious and the grand prix, F1’s only race in the USA, was hit hard when Hurricane Patricia blew through Texas and drenched the Circuit of Americas, forcing the abandonment of Saturday qualifying." Losses were being estimated at as much as £5M ($7.6M) on the weekend as Epstein described the weather as "financially devastating." Now the state of Texas is threatening to cut its $25M grant, which "effectively paid for Bernie Ecclestone’s hosting fee," by as much as 20%. Epstein: "The big question now is, is the race coming back? The state clearly made promises. I think we made a deal and we lived up to our end of the deal. It’s like if you go to a restaurant and order a dinner, and then after you’ve eaten the meal they change the price."
Meanwhile, a group of American investors led by Tavo Hellmund, the "driving force" behind the new Mexican Grand Prix, is said to be "interested in buying the Manor Grand Prix team" (LONDON TIMES, 11/11). AUTOSPORT's Rencken & Barretto reported sources said that the annual payment "will drop" to between $18M-$19.5M, after the state "changed the formulas used for measuring economic impact." Following an audit of how subsidies are calculated, the state concluded F1 is worth 20% less to Texas than "previously believed and therefore cut the funding."
It is understood the local government contribution "will also be cut" (AUTOSPORT, 11/11).
CHANGING TERMS: In Austin, Eric Dexheimer reported the dispute "raises the specter of a heavyweight legal battle, pitting the race’s wealthy local promoters against the state over whether Texas officials are reneging on their apparent commitment" in '11 to "support the Austin race with a quarter-billion dollar subsidy over a decade." COTA spokesperson Dave Shaw said, "An entire facility was constructed based on that deal. If the calculation is changed now, that’s effectively changed the terms of the deal." A spokesperson for the governor's office said that smaller attendance figures since the race's inception in '12 "wasn’t the main reason" for the $5.5M decrease this year. Rather, he said that the office "decided to use different formulas than the comptroller’s office used to calculate the race’s economic impact." Dexheimer wrote nixing the Austin race "would be catastrophic" to COTA. F1 CEO Bernie Ecclestone said, "If it's changed, it's going to be difficult to continue the race in Austin" (AUSTIN AMERICAN-STATESMAN, 11/10). In a separate piece, Dexheimer wrote that documents obtained by the newspaper under open-records laws showed that the cuts "first proposed by the governor’s office were even steeper." According to a Sept. 30 letter to COTA from Bryan Daniel, executive director of Abbott’s Office of Economic Development & Tourism, the agency proposed contributing only $15.6M in state support of the race -- a 37% decrease from the $25M the race "had been receiving through the Major Events Trust Fund." Correspondence showed that with the Oct. 25 race weekend less than a month off, local F1 race officials "pushed back." On Oct. 16, the governor’s economists "agreed to raise the subsidy," though only to $19.6M (AUSTIN AMERICAN-STATESMAN, 11/11).
LOOKING FOR COMMENT: SBD Global reached out to the office of Texas Gov. Greg Abbott, U.S.-based team Haas F1 and U.S. broadcast rights holder NBC Sports for comment on the situation surrounding COTA. Cait Meisenheimer, deputy press secretary for the governor's office, sent the following statement: "The Governor's foremost priority is to ensure that taxpayer money from the Major Events Reimbursement Program is spent in accordance with the guidelines and regulations set forth by the Texas Legislature. It’s inappropriate for an applicant to expect the Governor to violate the legal standard and an independent auditor’s decision." Haas F1, which will join the series next season, declined to comment on the news, and NBC Sports did not respond (HJ Mai, SBD Global).
