USA Grand Prix Austin (part deux)

[BobHWS]

The previous thread on this topic was locked (don't know why) so, since there is still a lot of interest in the topic and with an OK from a moderator, I am starting a new discussion thread.

To get things started, here is a recent opinion piece about the race from Austin's hometown paper (I give the paper credit for allowing opposing views to be heard). I think it's a good summary of all the potential problems with awarding a race to a place like Austin. I especially agree with the writer's point that "...many first-year attendees will leave with a been-there-done-that attitude."

Some would argue that attracting fans from Texas is not important, but I disagree and I would point to the example of Montreal. While a majority of the fans at the Montreal race come from outside the Montreal area and the province of Quebec, fans from the Montreal area and beyond (between Ottawa and Quebec City) constitute a sizable proportion of each year's crowd. And they come back year after year. Why? Because they are hardcore F1 fans.

I know, there are some hardcore fans in Texas too, just as there are some where I live in North Carolina. But are there enough to provide an annual local base of support for an F1 event whose tickets cost $250-500 each? It remains to be seen.

Mauzy: Is F1 sending Austin racing toward disaster?
Stephen Mauzy, Special Contributor
statesman.com
Published: 11:35 p.m. Friday, Aug. 5, 2011

So Austin is busting into the big time – set to become a "world-class" city, like other U.S. world-class cities: Watkins Glen, N.Y.; Detroit; Dallas; Phoenix; Las Vegas; Long Beach; and Indianapolis...

Formula One's high costs guarantees that many first-year attendees will leave with a been-there-done-that attitude. They won't be back...

And let's not overlook location: Austin, for all its splendor and charm, simply isn't a major destination city...

The overarching concern, though, is Bernie Ecclestone, whose thumb the Circuit of the Americas owners are now firmly under. Ecclestone is one of the world's shrewdest and least sentimental businessmen...

...If Ecclestone believes a more remunerative deal resides elsewhere, rumblings about a breach of contract will soon enough emanate from Europe.

So don't be surprised if a few years hence Austin finds itself in the same league as Watkins Glen, Detroit, Dallas, Las Vegas, Phoenix, Long Beach, and Indianapolis – a world-class city that has hosted Formula One races.

[Ken_T]

I think we get it. You are not a fan of F1 in Austin and/or perhaps the US.

Perhaps we should save the bandwidth and pick this up in spring when we can see the progress and better judge whether it will make it. Or we could keep speculating with articles about Austin from a finance guy in Colorado.

[Bononi]

I don't see any problems discussing the pros and cons of the GP since we can keep it as a friendly and interesting discussion.

Otherwise this will be a short thread.

[BobHWS]

Originally Posted by Ken_T

Perhaps we should save the bandwidth and pick this up in spring when we can see the progress and better judge whether it will make it.

Sorry Ken, but given that the previous thread on this topic had 998 replies and 44,904 views, the members of Ten-Tenths have voted with their mouse-clicks to continue the discussion.

[chillibowl]

glad you brought it back.

Originally Posted by BobHWS

Some would argue that attracting fans from Texas is not important, but I disagree...

in the previous thread you provided a link for an article by an economist discussing the merits (rather the lack of) on tax subsidies for sporting and entertainment events.

essentially it made the point (which i did find very valid) that people have a fixed amount to spend on entertainment. by offering incentives for sporting events all the local or state government is doing is encouraging people to change their spending habits (for example, instead of spending at a local restaurant i will spend at a sporting event) as opposed to creating any new spending an hence not generating additional tax revenue.

combined with your position that the State is overestimating how much in new taxes they will collect because of the race i took that to mean that you were of the opinion that having locals attend the race doesn't matter or make any difference to the financial viability of this event from the State's ability to collect taxes perspective.

forgive me if i read to much into that.

[neiltb]

the beeb are reporting that the austin race will be 19 of 20 next year (along with turkeys demise), so might get some extra exposure if it's close. it also gives them an extra few months to get ready.

I'm going to try and remain positive about this race as long as I can, I might fancy a holiday mid Nov next year.

[Purist]

I would have to disagree that there is an absolute fixed amount people will spend with or without an event. People will often spend something more than the norm for a special event that's coming to town. That is to say, if they were just going about their normal activities without the event, they would spend less in that period of time.

Most people who will actually be able to afford to go to the race will have some reserves, so they'll still eat out and go book shopping or whatever, as they normally do, and the spending on this event will be extra on top of that.

[chillibowl]

for sure its not so much of an absolute but more of a generalization.

the point was more that since most people have a fixed income/salary they can only spend so many dollars. whether they spend it on other forms of entertainment or whatever else the State government will still collect the same amount of taxes. so when the promoter says the state will generate 26mil(or whatever it is) in new taxes what they are not saying is that the State will lose 26mil in taxes collected from other purchases/activities hence no new revenue for the State.

regardless, that was my understanding of that point and since BobHWS first raised it with that link does he believe that locals will make the difference here or will it be visitors to Austin who will make this event a success financially.

for the record i am a huge fan of the idea of having a race here and will try very much to curb my spending in other areas so i can afford to come to this race next year. people of Texas get ready to enjoy the benefit of my contribution to your tax base!

[BobHWS]

Originally Posted by chillibowl

..combined with your position that the State is overestimating how much in new taxes they will collect because of the race i took that to mean that you were of the opinion that having locals attend the race doesn't matter or make any difference to the financial viability of this event from the State's ability to collect taxes perspective.

Chilli, no, I never thought or meant to imply that it didn't matter whether locals attend the race. Having people from the local and regional areas support the race is definitely important to its success.

Local fans are important for the promoter. Because the promoter makes most of his money from regular ticket sales (Bernie gets all the TV money, all the track signage money and all the hospitality suite money from fat cats and corporations), having a good base of people who can drive to the race the same day is vital to establishing long-term success. Those are the people who will come back year after year. They have lots of those fans in Montreal and England and they don't have many in Turkey and Malaysia, for example.

I do question whether there are enough such hardcore fans in and around Austin Texas. The fans will turn out the first year because it will be a hip thing to do, but we don't know what will happen after that. If the locals stop turning out, then the promoter finds it harder to make money. The track's proximity to Mexico will help the fan turnout, but we don't know how many Mexicans will be able to attend. And what happens if Mexico gets its own race?

As for the question of the supposed economic benefits of the track, I will once again cite this article:

Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?
by Dennis Coates, Brad R. Humphreys

Abstract

This paper reviews the empirical literature assessing the effects of subsidies for professional sports franchises and facilities. The evidence reveals a great deal of consistency among economists doing research in this area. That evidence is that sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation, those arguments most frequently used by subsidy advocates. The paper also relates survey evidence showing that economists in general oppose sports subsidies. In addition to reviewing the empirical literature, we describe the economic intuition that probably underlies the strong consensus among economists against sports subsidies.

[ujoint]

Just the thrill of seeing this thing actually being pulled off is more excitement than the race itself. And, why is the orignal thread locked. The information contained there keeps everything in perspective. Especially for new members joining in the conversation. I myself may hate the event one day and like it the next and so on. Do not be so quick to fault someone who might at this moment appear to love or hate this particular event. Texas you are going to get screwed financially whether you like it or not. By the way an opinion is just that. However, everything is contextual an should be in reference to something. So, this 2nd thread about Circuit du whatever will take a few hundred post to establish its points of view with relevance to the subject at hand.

[JeremySmith]

When you guys stop stomping the idea into the ground I will Merge the threads until then just carry on talking...

[Chatters]

Originally Posted by BobHWS

Formula One's high costs guarantees that many first-year attendees will leave with a been-there-done-that attitude. They won't be back...

True, but if the circuit can fit, say, 100,000 people, in a country of 250,000,000+ , finding more "first-year attendees" won't be that much of an issue.

Plus you have to factor in overseas visitors, die-hard American motorsports enthusiasts etc...

[bjohnsonsmith]

Thanks for the Part Deux; the saga of the Austin GP isn't over.

[Marbot]

I was wondering what the effect of not having a US driver or a US team might have on the US GP?

Do the fans mostly go to see Ferrari/Alonso or whoever? Or is it just that they love F1? Or is it just a good day out? Or something else?

[Bononi]

Somebody somewhere sometime said that Ferrari have a huge fan base in the US.


I wonder...

[Spritle]

Originally Posted by Bononi

Somebody somewhere sometime said that Ferrari have a huge fan base in the US.


I wonder...

They sell more cars in the US than anywhere else so that has to help. I know there was always a bunch of Ferraris parked in the lots at Indy.

[Richard C]

Originally Posted by Marbot

I was wondering what the effect of not having a US driver or a US team might have on the US GP?

Do the fans mostly go to see Ferrari/Alonso or whoever? Or is it just that they love F1? Or is it just a good day out? Or something else?

My opinion is that in general the inclusion of a US driver is not going to make much difference. That the vast majority of those who would attend are going to be long standing F1 fans with the next largest groups (at least for the first race) being curious locals and general racing fans who are curious regardless of who is driving.

I think the only "US driver" thing that might really alter attendance numbers would be if an existing US superstar driver (NASCAR) was to move to F1, then the curiosity factor could jump up another notch and cause a number of get off the fence and attend an F1 race. An American team and/or manufacture involvement might help more. But there is little chance of that happening.

Richard

[rblanshard]

I don't see this as a economic boondoggle for the State of Texas or the citizens of Austin.

I'm up here in Dallas - a mere 3 hours drive north of Austin - and I have a dozen friends with a trip to Austin and the USGP on their calendars. We'll be making the trek down in either June or November. And if I have a dozen friends, think of the maybe additional 1,000 from the immediate North Texas area who'll make the trip. And not just in North Texas - Houston is the other major metropolitan area just 3 hours away.

Now, down here in the South, we're planted firmly in NASCAR country. Just think of the curiousity factor from all those NASCAR bubbas who might want to check out the race just for kicks.

The question/concern of 100,000 fans coming to Austin, I believe, is hugely overrated. I mean, afterall, if UT football is capaple of getting 100,000 fans 4 weekends out of the year, I just can't see this thing failing or becoming an economic albatross around the neck of the Texas taxpayers.

Also, I haven't seen it brought up - it may have in the previous Austin GP thread - but what about the potential economic impact from the other race series coming to COTA?

V8 Supercars and Moto GP? And consider this: the ALMS will have a race in Oklahoma City next year. How much longer before the ALMS announces back-to-back races in OKC and Austin.

[JeremySmith]

Originally Posted by rblanshard

I don't see this as a economic boondoggle for the State of Texas or the citizens of Austin.

I'm up here in Dallas - a mere 3 hours drive north of Austin - and I have a dozen friends with a trip to Austin and the USGP on their calendars. We'll be making the trek down in either June or November. And if I have a dozen friends, think of the maybe additional 1,000 from the immediate North Texas area who'll make the trip. And not just in North Texas - Houston is the other major metropolitan area just 3 hours away.

Now, down here in the South, we're planted firmly in NASCAR country. Just think of the curiousity factor from all those NASCAR bubbas who might want to check out the race just for kicks.

The question/concern of 100,000 fans coming to Austin, I believe, is hugely overrated. I mean, afterall, if UT football is capaple of getting 100,000 fans 4 weekends out of the year, I just can't see this thing failing or becoming an economic albatross around the neck of the Texas taxpayers.

Also, I haven't seen it brought up - it may have in the previous Austin GP thread - but what about the potential economic impact from the other race series coming to COTA?

V8 Supercars and Moto GP? And consider this: the ALMS will have a race in Oklahoma City next year. How much longer before the ALMS announces back-to-back races in OKC and Austin.

Precisely....Good post thank's

[JeremySmith]

Originally Posted by Bononi

Somebody somewhere sometime said that Ferrari have a huge fan base in the US.


I wonder...

I think I am correct in saying that Ferrari sell most cars in North America than anywhere else in the world..

The fans went beserk for Michael Schumacher at Indy if you recall...


The Grand Prix is going to be huge IMHO...

[Bononi]

Yes, that's it. And now soon next to your door !

[JeremySmith]

Today we have a RedBull F1 car sitting outside our state museum..

I am hoping that they will do a road show ahead of next years race..

We had one of Michael Schumacher's Ferrari's sitting at our local Ferrari dealership, that was interesting as many people went inside to take a look...

[dyewat808]

I think I said in the first thread early on that I'd love to see this GP work. It's got several series racing there on the cards like rblanshard said, and that's not counting extra events like track-days and smaller club events too which might decide to race there.

To me it sounds like a far more workable and sustainable circuit than some of the wacky places F1 has been to recently.

We're talking more about a GP not working in one of its more traditional fan bases, than the new circuits in far-flung corners of the world not working - seems a bit odd to me.

[JeremySmith]

I believe that it will work as they plan to use the facility for much of the year as a research centre as much as anything else..

[Marbot]

Originally Posted by JeremySmith

Today we have a RedBull F1 car sitting outside our state museum..

Here is the 'Red Bull' again with DC at the wheel. YeeHa!



I wonder if one of them did actually manage to get a rope on it?