USA Grand Prix Austin (part deux)

[BobHWS]

People in Indianapolis to people in Austin: "We tried to warn you about the evil dwarf"

Ecclestone's antics should ease pain of Indy's F1 loss
November 14, 2011
Indianapolis Business Journal
Anthony Schoettle

..The way Ecclestone has treated the folks in Austin, Texas, this month has to make Indianapolis Motor Speedway officials at least a little happy they no longer do business with the man known as the Iron Dwarf...

But the cost of not having to deal with Ecclestone has to at times seem priceless. The headaches that go with doing business with Ecclestone were on display in Austin the past two weeks...

..But it all sounds so familiar to those of us in Indianapolis.

Ecclestone came here promising to use the U.S. Grand Prix at Indianapolis to grow the sport in North America. IMS chief Tony George built him a track and other expensive infrastructure—to the tune of $75 million—and cut F1 a sweetheart deal which assured the series took all the broadcast money and more.

After a one-year honeymoon in 2000, Ecclestone promptly came in, scoffed at Indy’s home-spun charm, criticized the city’s airport, and blasted the way the event was being marketed and the way locals were embracing the great F1 race.

Not surprisingly, attendance waned. It’s not clear which came first, Ecclestone’s critical outlook on this city or locals’ lost interest in the race. An F1-born Michelin tire fiasco in 2005 certainly didn’t help...

[BobHWS]

A columnist from Houston might know what the problem is with the Austin race:

Forget Formula One, how about NASCAR in Austin? With F1 race in danger, any horror is possible
By John Flood
11.14.11 | 11:32 am
houston.culturmap.com


..The only leverage Tavo has in this deal is his relationship with Bernie Ecclestone and the contract they agreed to with him. He has no money and his importance has been questioned by those who are funding this event. COTA has been trying to buy him out, but have only offered peanuts — they do not seem to understand his value to Formula One Management (FOM) and Ecclestone.

In an effort to improve his position and increase his leverage, Hellmund asked the Texas State Comptroller’s office for an opinion regarding the event’s funding...

...Hellmund asked Combs whether the major events funding agreement would be threatened by a change in management for the USGP. He asked whether a transfer of rights to COTA would render the funding agreement moot. Many seem to think, erroneously, that he was working through possible changes in investors as rumors suggested that a major investor had backed out. That was not the case.

The circuit managers had in fact been trying to find a way to disassociate Hellmund and Full Throttle Productions from the event. Hellmund hoped the comptroller’s office would say a change in management would void the original deal and that any new management team would need to start from square one. That’s not what happened. They agreed to support the event regardless of who the managers and owners were.

Wheeling & Dealing

Combs sent a letter to Ecclestone regarding a change in management that said, “Should the proposed assignment be consummated, the State of Texas, through this agency, looks forward to working with the Circuit of the Americas to bring the Formula One United States Grand Prix to Texas in 2012."

With that pronouncement, Tavo lost $25 million dollars of leverage ($250 million total) and his own value to the effort was reduced to whatever amount of money COTA was willing to pay him for the rights...

...It seems as if Bernie is on Tavo’s side of this argument and I understand why: They have known each other since Tavo Hellmund was a child.

I believe that Ecclestone is trying to raise the stakes and to improve Hellmund's leverage with COTA. The two have known each other for more than 30 years...

...Bobby Epstein is said to have negotiated with Ecclestone for a direct contract with F1, and Ecclestone has offered one to COTA. But at this point no agreement has been reached, probably because Ecclestone upped the fees considerably. A deadline has been set and a line has been drawn.

The deal must be closed before the World Motor Sports council meets in December to approve the final schedule.

[BobHWS]

More from Autoweek.com on the conflict that is threatening the Austin F1 Race:

U.S. Grand Prix in Austin: Ecclestone’s December deadline looms

...In September, Hellmund asked the comptroller, who administers the fund, if things would change if the race had a different promoter. It would not necessarily change, the comptroller said.

The between-the-lines indication here is that Hellmund might have been looking for a way out, either assigning the F1 race deal he acquired through Full Throttle to Epstein or canceling the deal, with Epstein presumably requesting a new deal from Ecclestone. Either way, likely Hellmund would get some sort of buyout since he did all the heavy lifting on the racing end, using his contacts to secure the deals and initiate construction of the track.

Tacit confirmation of this comes from sources in Europe who say there was a meeting in Ecclestone's office in an attempt to iron everything out during the week before last month's inaugural Grand Prix of India. In attendance were Ecclestone, Epstein and Hellmund, and probably Sexton and a phalanx of attorneys. It was this meeting, unreported until now, upon which Ecclestone based his casual comments to the media at the race in India and this weekend in Abu Dhabi, that the holdup in Austin is an internal conflict within its management group.

By all accounts the meeting did not go well. Sources in Europe and the United States suggest that Epstein was offered a new contract but he has not signed it, presumably because he doesn't like the terms. Ecclestone hasn't been paid, and the state of Texas hasn't disbursed the $25 million from the trust fund. The rules say it can't until after Nov. 18, less than one year before the scheduled event. Even so, online inquires suggest that all of the applications, paperwork and meetings required to apply for the money have not been completed...

Read more: http://www.autoweek.com/article/2011...#ixzz1dhkNtw89

[JeremySmith]

Thank you Bob you saved me a lot of work...

[Spritle]

While my totally uniformed opinion is the F1 race will go on; if some of these spanners in the works effect Bernard's 1st US folly, what will happen to the Moto GP, the Technology Center, possible NASCAR events and the other things planned for Austin?

Will they go on as planned? Will it matter in the long run if F1 is absent as long as the taxpayers and city don't get screwed?

[thebear]

Originally Posted by Spritle

While my totally uniformed opinion is the F1 race will go on; if some of these spanners in the works effect Bernard's 1st US folly, what will happen to the Moto GP, the Technology Center, possible NASCAR events and the other things planned for Austin?

Will they go on as planned? Will it matter in the long run if F1 is absent as long as the taxpayers and city don't get screwed?

The answer is "MONEY". If it is available for operating expenses in between events there should be no problem. I don't know what the `split' is for ticket revenues but there should be something left for the track at the end of the weekend.

[JeremySmith]

Read all about it!

http://joesaward.wordpress.com/2011/...t-goes-public/

[wolfhound]

And the view from Autosport can be found in the link below.

http://www.autosport.com/news/report.php/id/96246

Looks like the USA GP in Austin is currently on shakey ground.

[BobHWS]

Here's coverage from the Austin newspaper:

F1 track work stops amid dispute
By John Maher
AMERICAN-STATESMAN STAFF
Updated: 5:14 a.m. Wednesday, Nov. 16, 2011
Published: 10:56 p.m. Tuesday, Nov. 15, 2011

Almost a year from a race premiere, Austin's $300 million project to bring international Formula One racing to the United States ground to an unexpected and perilous halt Tuesday.

Key investors in Circuit of the Americas said they are immediately and indefinitely suspending construction of the 3.4-mile racetrack just southeast of Austin, a move that idles about 300 workers.

Also, Texas Comptroller Susan Combs announced a change in plans to provide a $25 million a year in state financial incentives to the project, saying a first payment would not be made until after the initial F1 race is held as currently scheduled on Nov. 18, 2012. Previously, it was thought that the payment could be made at any point up to a year in advance of the race.

Circuit investors, including San Antonio billionaire Red McCombs and local businessman Bobby Epstein, said construction was halted because they have yet to obtain the rights for the F1 race from promoter Tavo Hellmund...


...Speaking shortly before the investors took action, Combs said, "The State of Texas will not be paying any funds in advance of the event. Further, as is the case with all (Major Events Trust Fund) events, each application will be reviewed and analyzed for its likely economic impact, and only after the race occurs would any funds be disbursed."

..One sticking point might be the amount of money the promoter would receive from the track owners for the rights to the race.


...Though the buzz about the track has been about F1, Tuesday's announcement also revealed that the circuit does not currently have the rights to stage another international racing event, MotoGP.

According to circuit officials, rights to run one of those motorcycle racing events, a 10-year deal beginning in 2013, are currently held by Hellmund's Full Throttle Productions and 3FourTexas MGP, of which motorcycling legend Kevin Schwantz is the manager.

[BobHWS]

Even if Tavo and Epstein manage to kiss and make up (and, in Bernie's words, "get married"), Susan Combs has introduced a new threat to the race, i.e., that no state money would be paid to Bernie until after the first race is over. I don't think that will go over very well with Bernie.

Bernie gets his money up front. He doesn't kowtow to minor, provincial government officials who must ultimately answer to free citizens living in a democracy. Bernie prefers to deal with those he considers his equals--dictators and potentates who run the whole show in their kingdoms. Those guys write their checks to Bernie the same day Bernie gives them a race. Combs' change in policy is what may ultimately doom the Austin race, even if Tavo and Epstein go to the altar together.

From the Statesman article (above):

Also, Texas Comptroller Susan Combs announced a change in plans to provide a $25 million a year in state financial incentives to the project, saying a first payment would not be made until after the initial F1 race is held as currently scheduled on Nov. 18, 2012. Previously, it was thought that the payment could be made at any point up to a year in advance of the race...

Combs has been a big supporter of the race since 2008, when Hellmund first pitched the idea to her.

Tuesday she introduced some doubt, citing "recently publicized disagreements between the race right holders and the circuit developers," slowdowns at the Austin construction site and a potentially competitive F1 race recently awarded to New Jersey as reasons for concern.

Speaking shortly before the investors took action, Combs said, "The State of Texas will not be paying any funds in advance of the event. Further, as is the case with all (Major Events Trust Fund) events, each application will be reviewed and analyzed for its likely economic impact, and only after the race occurs would any funds be disbursed."

No state money has been spent on the F1 race project, Combs emphasized.

[Marbot]

"each application will be reviewed and analyzed for its likely economic impact, and only after the race occurs would any funds be disbursed."

Ouch! If you're signing a ten year contract with Bernie, he's not going to want to hear that.

[wolfhound]

Latest on this situation from Bernie

http://www.autosport.com/news/report.php/id/96270

[BobHWS]

Game Over.

Game over for the U.S. Grand Prix and the Circuit of the Americas
Autoweek.com
By: Steven Cole Smith on 11/16/2011

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 and 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...

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 on Tuesday from a gutsy incentive she helped engineer...

..So here comes Punch One: Comptroller Combs, clearly weary of the infighting inside the track organization, announced on 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 semisweetheart 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 the Circuit of the Americas and not to 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...

...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...


Read more: http://www.autoweek.com/article/2011...#ixzz1dtQR6wDs



The moral of the story: Don't mess with the evil dwarf.

[Marbot]

Bernie's beginning to lose his patience.

[bjohnsonsmith]

Originally Posted by wolfhound

And the view from Autosport can be found in the link below.

http://www.autosport.com/news/report.php/id/96246

Looks like the USA GP in Austin is currently on shakey ground.

Having read that article, I would have thought it's all over bar the shouting, as the late James Hunt would say.

[wolfhound]

The only hope might be if FOTA put pressure on to try to get Bernie talking with the various parties with the view of the USA GP taking place rather than maximising his $$$$$$.

[Marbot]

Originally Posted by wolfhound

The only hope might be if FOTA put pressure on to try to get Bernie talking with the various parties with the view of the USA GP taking place rather than maximising his $$$$$$.

Never going to happen. It never has before.

And the simple fact is that Bernie isn't the one who's holding things up. This time it's another Billionaire that's holding all the cards, and Bernie isn't likely to be offering him cut rate deals.

[Sodemo]

At least we managed to rescue Donington Park from the jaws of F1.

Long live national racetracks.

[Thaw Daggerslash]

Feel the most for the fans with a situation once again. Another clear point of F1 not giving a single thought about them...

Know how that feels, to have an announcement with an F1 race being local to you, with the Donington fiasco, and whilst F1's just a sport, it is still incredibly disappointing.

[expaddockrunner]

1659 MOTORSPORT: Bernie Ecclestone, Formula One's supremo, says the United States Grand Prix is on the brink of being axed from next year's calendar. "We've done everything we can do to make this race happen," he said. "It will be dropped for sure, 100%." Quoted on the BBC Sports News page:

[Born Racer]

100% doesn't necessarily mean 100% here. This is Bernie we're talking about.

I'm glad I haven't got my ticket yet, as I was planning on going and crossing the Atlantic.

[Richard C]

What a mess.

I suspect we will not have a successful and long lasting (more than a few years) F1 race in this country until after Bernie is gone. Maybe the NJ race will surprise me? Assuming it also doesn't crash and burn as well.

Richard

[chillibowl]

first off very sad news...if it is true i seem to recall i have a hat somewhere where i need to eat.

Originally Posted by BobHWS

...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.

have a problem with this part. old man George, despite all his control freak issues, took a very hands on approach to running his team and turned it back into one of the most recognizable brands and most successful sporting franchises over the last 15 odd years. sort of a bad analogy and not even motor sports related at all.

back on topic im not sure how only 1 race in the US makes or breaks this deal.

the superbowl is of course held once every year, but when she mentioned the college final four tournament (from Combs' press release) it should be noted that this event occurs every year over the course of three weeks and happens at multiple venues across the USA.

uniqueness doesn't seem to be a criteria here.

[Richard C]

Originally Posted by BobHWS

Bernie gets his money up front. He doesn't kowtow to minor, provincial government officials who must ultimately answer to free citizens living in a democracy. Bernie prefers to deal with those he considers his equals--dictators and potentates who run the whole show in their kingdoms.

Right on target!

Richard

[Tourer]

I guess that we'll know for sure in a couple of weeks - for all the naysayers and negativity, it sounds like that is the deadline and COTA have till then to complete a contract and provide financial guarantees to BE. Quite where all this might leave Tavo is unclear.

On the other hand, COTA could go ahead and build the track but not for F1 and thus cut back on a huge range of F1 specific costs and also avoid the sanctioning fee. They could work out an arrangement with Tavo for MotoGP and V8 Supercars & then get on with putting other suitable events together along with the mid week circuit use already planned.

That way they should still have a viable business I would have thought.