While this year’s rain-soaked United States Grand Prix was indeed a thrilling race, it was not a good weekend for the event itself or its venue, Austin, Texas’ Circuit of the Americas. Horrendous weather meant F1 in Austin was “financially devastating” for COTA. Now the track has more bad news: Texas is reportedly cutting its annual contribution to the race.
Confirmation of this comes tonight from the Austin American-Statesman, which painted a dire picture of these cuts and their after-effects:
Officials with the governor’s office and Circuit of the Americas confirmed that the state’s payment to support the 2015 race would drop by more than 20 percent from previous years. The state had contributed about $25 million in 2012, 2013 and 2014; this year the amount will be closer to $19.5 million.
Bernie Ecclestone, the sport’s chief executive, told the American-Statesman the reduction could mean cancellation of the Austin race. “If it’s changed, it’s going to be difficult to continue the race in Austin,” he said, speaking from Brazil, the location of this weekend’s F1 race.
While $5.5 million doesn’t seem like much, the Statesman’s report notes that much of the profits to local promoters comes from government support: namely, the $250 million over a decade promised in 2011, which spurred the construction of COTA in the first place. The track pays that money directly to Ecclestone in order to sanction the race.
The contribution is going down, the newspaper reported, because the state has different formulas now to calculate the race’s economic impact. Circuit officials said they now feel like the state’s going back on their deal.
Likewise, COTA Chairman Bobby Epstein declined to paint this any other way than very bad news:
“To use a technical term,” Epstein said, “I think we’re screwed.”
The Statesman has a very good report on the situation and you should read it in full. But it doesn’t take a business expert to know that the potential loss of the F1 race, COTA’s flagship event, would be catastrophic for the race track. If F1 is screwed, COTA is screwed.
There’s no word yet on how these cuts will affect future races exactly; Austin remains on the 2016 F1 calendar, set for next October.
The state of Texas’ contribution to F1 has been questioned and railed against by many since its inception, with critics doubting the race’s actual economic impact and wondering why it would be funded at such a high level during times when the state made deep cuts to education, public health and other services.
The U.S. Grand Prix has taken other hits since its inaugural race, too. Attendance has been dropping steadily, and now it has new competition from the race in relatively nearby Mexico City. (The nasty weather this time around certainly didn’t help anything.)
I’ve long felt questions over the state’s contributions to F1 are valid, and worth asking, but as a race fan and as an Austinite I hope the powers-that-be find a way to make this work.
Photo credit Getty Images
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