A $33 million dollar hosting fee that was supposed to be paid ahead of last month’s Formula One United States Grand Prix has yet to be paid by Circuit of the Americas, according to a report published in the Austin American-Statesman. That fee was supposed to be paid ahead of the October 25 race date.
F1 boss Bernie Ecclestone told the Statesman that COTA was given an extension to pay the fee in light of a decrease in state funding:
We said they can pay late this year. They get money from the state, and the money from the state is late, so that’s why they are late.
Between the state of Texas’ screwing around with the Major Events Trust Fund and the torrential downpours that made F1 weekend miserable and damaged the circuit, it’s safe to say that money is a bit tight at COTA right now.
The Statesman reports that hosting fees for flyaway dates such as the United States Grand Prix are usually paid three months ahead of a race, as outlined in the prospectus for the flotation of Formula One on the Singapore stock exchange.
That didn’t happen for the USGP this year, thanks to a change in how Texas calculates the financial support different events receive from the Major Events Trust Fund. Funds from the METF are granted to large events with the expectation that they will make the state more money in return.
This year, the state used a different method of calculating the race’s contribution to the state via sales tax, thus determining that COTA should only receive $19.5 million instead of their usual $25 million from the METF. Turnover in state leadership has also shifted the responsibility of administering the fund from the now former state comptroller’s office to that of Governor Greg Abbott.
Naturally, the circuit claims that what the state is doing is unfair. COTA maintains that they have always met what was required to qualify for METF funding. To suddenly change the amount COTA gets from the METF mid-way through the track’s contract for hosting the USGP is a disastrous.
Meanwhile, per the Statesman, the hosting fee for F1 increases by 10 percent every year.
COTA chairman Bobby Epstein maintains that it’s fine to pay Formula One late—the question at this point will be if they can get enough funds to do so. No money means no race for 2016.
Ecclestone seemed unfazed as to whether they’ll work it out, however, telling the Statesman:
The person who dealt with this in the first place is no longer there. The governor is no longer there. So they have got new people, but they should pay what was agreed. I think we will get the funding back on track again.
F1 isn’t without a backup plan, however. In addition to adding a race in yet another sketchball dictatorship, the Statesman reports that Ecclestone is looking at adding another venue in the United States—possibly in California.
Contact the author at firstname.lastname@example.org.