Austin F1 GP DOA
Tuesday, Nov. 15, 2011, will go down as the day when the racing died in Austin, Texas. The 2012 Formula One United States Grand Prix, as well as the track that would host it, the Circuit of the Americas, were dealt a one-two punch that seems unsurvivable, though neither the race nor the track has formally been pronounced dead.
Of course, neither has Texas Gov. Rick Perry's presidential campaign but we all know how that's going.
The two punches that apparently finished off the race and the track, which have been ailing for six months, began when Texas comptroller Susan Combs, by far the biggest fan motorsports had in the state government, backed away Tuesday from a gutsy incentive she helped engineer.
Using a special state trust fund which, more than 200 times, has provided money to encourage big annual public events to come to Texas, Combs was going to advance race organizers $25 million a year, to be repaid by the projected additional tax money generated from the event, mostly from tourists.
This $25 million, to be paid up to one year in advance of the U.S. Grand Prix, would have roughly covered the annual sanctioning fee to F1 honcho Bernie Ecclestone. This is a lot of money--probably double or triple a NASCAR Sprint Cup Series sanctioning fee--but it is also a comparative bargain, given what some race organizers in other countries must pay Ecclestone. This contract was assigned to Full Throttle Productions, headed by Tavo Hellmund, whose personal family relationship dating back 40 years with Ecclestone was an enormous factor in getting the deal. It was not assigned to the other two founding partners of Circuit of the Americas: Colorful businessman Red McCombs and Bobby Epstein, the low-key founder of a money management firm.
So here comes Punch One: Comptroller Combs, clearly weary of the infighting inside Circuit of the Americas, announced Tuesday that she would not advance the $25 million to the organizers, which--had all gone well--could have been paid as early as Saturday. The debut F1 race was scheduled for Nov. 18, 2012, and the guidelines, particular to this one race event, said the money could be advanced as early as 364 days before the event takes place.
That option is gone. Now, the state would offer up the money after the race, assuming certain criteria were met. To get the race now, promoters would have to advance that $25 million out of pocket, assuming such a semi-sweetheart deal is even on the table. By all indications, it is not.
Which leads up to Punch Two: Financier and main money man Epstein--billionaire investor McCombs is reportedly in for less than 10 percent of the budgeted $300 million or so--would like to have Hellmund's 10-year F1 contract assigned to Circuit of the Americas and not Hellmund's Full Throttle Productions. Ecclestone has apparently offered Epstein a new contract but not at the friends-and-family rate Hellmund received. For whatever reason, according to multiple sources, Epstein doesn't like the contract Ecclestone provided.
So later Tuesday afternoon Circuit of the Americas, which apparently no longer includes co-founder Hellmund, issued a statement: "Organizers of Circuit of the Americas, a premier motorsports racing and entertainment venue being developed in Austin, Texas, are suspending further construction of the project until a contract assuring the Formula One United States Grand Prix will be held at Circuit of the Americas in 2012 is complete. The race contract between Formula One and Circuit of the Americas has not been conveyed to Circuit of the Americas per a previously agreed upon timetable."
What "previously agreed timetable" is that? No one is talking. Presumably, Hellmund expected to get paid for landing a 10-year F1 contract, a 10-year MotoGP contract, bringing Australian V8 Supercars to the U.S., locating a site for the track, arranging for Tilke, the top F1 track designer in the world to create it, and getting the state of Texas to advance the money for the sanctioning fee. Presumably, he has not been paid what he expects. But again, no one is talking aside from prepared statements.
This is Hellmund's: "After years of effort in getting F1 to Austin, Full Throttle Productions and city, county and state officials have done all we could. It is the responsibility of Circuit of the Americas to bring it across the finish line."
In the past few months, there has been evidence that Epstein, who is used to running his own show, wants to run this one, too, which is sort of like George Steinbrenner insisting that he should coach his New York Yankees, except that Steinbrenner actually had some experience in baseball. Epstein may be guilty of thinking he can bluff or shame Ecclestone into awarding Austin a new sweetheart deal, but the F1 king has countries, tracks and promoters standing by, begging for a race. He does not need Austin, especially since he has the New Jersey race on tap beginning in 2013.
Thus, barring something that would qualify as a motorsports miracle, there will be no F1 race in Austin, which--according to Epstein's statement--means there will be no Circuit of the Americas, either.
So what will happen to this big, $40-million (that's dollars spent until now and a long way from what is needed for completion) mud hole near Austin? Perhaps the world's nicest RallyCross track? Presumably it could be completed as a less-ambitious, cheaper paved track, attracting lesser racing series, but only NASCAR Sprint Cup would essentially guarantee a profitable product, and Sprint Cup isn't coming to Austin. AutoWeek