As the United States Grand Prix looks increasingly in doubt for 2016 in the wake of a wavering commitment from the State of Texas, race-watchers have pointed to one recently-resurfaced letter from 2010 as proof that the state can’t shake its commitment. But will it have any sway with Texas’ new state officials?
Forbes reports this letter from former Texas Comptroller of Public Accounts Susan Combs, sent in 2010, says in no uncertain terms that the state will pay $25 million per year to host F1 races in the state from 2013 through 2021.
Currently, the United States Grand Prix at Circuit of the Americas is listed as “subject to agreement” on the 2016 F1 schedule. The U.S. Grand Prix organizers rely on receiving the full $25 million contribution from the state’s Major Events Trust Fund to make their payments to host the F1 race, particularly after this year’s disastrous race weekend that was spoiled by hurricane-affected weather and close timing with the nearby Mexican Grand Prix.
Instead, the state wants to cut its contribution to $19.5 million based on a new method of calculating an event’s economic impact.
The letter from Combs not only outlines the amounts that will be paid, but the dates by which Texas will send the money:
In this letter, Combs stating “we will be sending $25 million dollars to [Formula One World Championship Limited] by the end of July 31st” in writing to F1 chief executive Bernie Ecclestone himself sounds pretty certain. Forbes points out that this letter was written without any caveats, such as a provision that would allow for changes in state government to modify the agreement made between F1 and the state.
Surprisingly, Forbes says that Circuit of the Americas chairman Bobby Epstein said last month that there was no written agreement from the state to pay the $25 million. Thus, this letter could be all that the circuit and F1 have in lieu of a regular contract.
However, Texas Governor Greg Abbott told Forbes that the letter was “merely an effort to indicate broad support” and thus, would not be a binding contract between the two parties. Seems to us like that’s the kind of thing that might have to be settled in court.
We’ll see whose interpretation of this letter is right in the following months, and hopefully an agreement can be worked out for the benefit of everyone. Even Abbott admitted that the F1 grand prix “pumps hundreds of millions of dollars into our economy” in a promotional supplement quoted by Forbes.
While F1’s high sanctioning fees certainly exacerbate this problem, it’s still poor form for the state to promise something and then go back on their agreement. Perhaps the state can negotiate to move COTA’s (tentative) date further from the Mexican Grand Prix this time to lessen the facility’s reliance on state funding to host the event.
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