no F1 in Austin, means maybe no Moto GP in Austin

[Racer X]

ACK!

http://moto-racing.speedtv.com/artic...e-in-jeopardy/

MOTOGP: Austin Future Cloudy
The expected cancellation of the Formula 1 event at the Circuit of the Americas will likely have a domino effect on the track's ability to host MotoGP as well.

Over the past day cascading layers of information have painted an increasingly bleak picture of the future of the 2012 Formula 1 USGP scheduled to take place at the Circuit of the Americas in Austin, Texas.

The latest news coming out of the situation has F1 supreme Bernie Ecclestone admitting that the race is on the verge of being officially cancelled as construction has halted at the facility, Tavo Hellmund's Full Throttle Productions no longer holds a contract to run the race (and at the moment, no one does), and the vital $25 million cash injection from the Texas Major Events Trust Fund is no longer guaranteed.

While the spotlight is on the F1 race, the 10-year contract for the MotoGP World Championship slated to kick off in 2013 must also be considered in dire jeopardy as Circuit of the Americas officials have confirmed that the track's construction will not resume without a Formula 1 race contract in place.

The loss of the race would be a bitter disappointment to the two-wheeled series that is looking to expand its American presence. The location was considered ideal as Texas has strong ties to the sport with one of its most popular ever champions, Kevin Schwantz (also a key figure in organizing the race), hailing from the state, not to mention current MotoGP stars Ben Spies and Colin Edwards.

That said, MotoGP is relatively well insulated should the race fall through. Following the April announcement of the addition of Austin to the schedule, it was widely speculated that the Red Bull Indianapolis GP, one of two existing American rounds along with the Red Bull USGP at Laguna Seca (which already had a deal in place to continuing hosting through 2014), would be cut to make room for Austin.

However, the Indy race was also re-upped through 2014 this past September, guaranteeing that the United States will continue to be well represented on the MotoGP calendar no matter what happens with the Circuit of the Americas.

[azboy]

There's quite a bit more to this. I saw the NYC race consortium front man interviewed on the Bloomberg financial news channel, a week or so back.

http://www.sportbusiness.com/news/17...-new-york-2013

[MAD750]

http://houston.culturemap.com/newsde...-egos-houston/

[ABN2nds]

I hope it gets completed, but I also hope here in Indy we can keep the Moto GP. I would travel to TX to see it though.

[TheGeek]

It won't happen--the Austin hippies are too busy bitching about green.

This town is a shit basket, plain and simple.

Just cruise down congress and you'll figure it out rather quickly.

Why I haven't left this god forsaken land is beyond me--course the houses here are cheap as hell so it's a win/win.

[T286]

win/loose

[TheGeek]

win/loose

Lose to win? LOL.

TBH I'm miserable. I wanted to see MotoGP out here.

I wish people would just STFU and build the track. It will draw in SO much money.

[cggunnersmate]

That's okay, if they do finish the track and F1 and MotoGP do race there, then within a couple years of the tracks completion people will build residential neighborhoods nearby, move in next to the track and then bitch about the noise.

[Axecent]

It won't happen--the Austin hippies are too busy bitching about green.

This town is a shit basket, plain and simple.

Just cruise down congress and you'll figure it out rather quickly.

Why I haven't left this god forsaken land is beyond me--course the houses here are cheap as hell so it's a win/win.

It has absolutely nothing to do with 'green' in the sense of environmental issues and everything to do with 'green' in the sense that COTA didn't have the money to pay Bernie Ecclestone his $25,000,000 fee BEFORE the race, and they couldn't/didn't issue a letter of credit backing up the contract for the fees to FOA. They were WAY behind on schedule, underfunded, blowing smoke that they were funded AND on schedule, not talking with the promoter, etc. COTA was counting on getting that $25MM from the state coffers through the special events funds....once Ecclestone started questioning COTA's ability to get it built and then proffering that Tavo's contract was null due to breach, Combs pulled the plug on the $25MM until after the race was put on, so that taxpayers could be assured that things were done according to the rules, that the race actually was put on, and that it was 'repeatable'.

AXE

[jrflanne]

It sure would have been a great thing. So sad.

[Hellgate]

It won't happen--the Austin hippies are too busy bitching about green.

This town is a shit basket, plain and simple.

Just cruise down congress and you'll figure it out rather quickly.

Why I haven't left this god forsaken land is beyond me--course the houses here are cheap as hell so it's a win/win.

Shit basket? What do you mean? There is so much stuff going on here.

The bottomline is money, people don't get paid and projects don't happen

It appears to me that all parties came into this without a full commitment to success. Everyone was/is hedging their bets.

Read the interview in the Statesman, Susan Combs, the lead proponent of this claims she "doesnt know" anything about anything and is in the dark on the behind the scenes happenings. She's a good example of not going all in. To me she should have been all over this, helping to coordinate/broker. But no, she punted just like everyone else.

I hope someone can pull a rabbit out of their hat.

[budoist]

Is it really the comptroller's job to co-ordinate and broker deals? With everything else going on in Austin, is it reasonable to expect her to to have that intimate level of involvement in these business deals?

[Hellgate]

Is it really the comptroller's job to co-ordinate and broker deals? With everything else going on in Austin, is it reasonable to expect her to to have that intimate level of involvement in these business deals?

Yes when she initiated the discussion, and planned to commit $25,000,000 of Taxpayer money over the next 10 years. Yes I expect her to know what is going on, and IF this truely is a good project for Texas she should be trying to help make it happen if it really is that good. Her job as the State CFO is to fully understand major financial projects that the State is involved in. IMO she does not understand or is taking the 5th.

[claudio]

It won't happen--the Austin hippies are too busy bitching about green.

This town is a shit basket, plain and simple.

Just cruise down congress and you'll figure it out rather quickly.

Why I haven't left this god forsaken land is beyond me--course the houses here are cheap as hell so it's a win/win.

One of the selling points for the track was to get the non-motorsports onboard. Residents, businesses, and churches downtown complain that there are too many events that shut down streets. Several runs would be moved to the track. That's why Run Tex had some pro-race sign up on their billboard by MoPac. It may not totally appease the hippies, but at least it doesn't totally ignore them. Making the first F1 race happen is the biggest obstacle to get past, then everything else should go considerably smoother.

[Axecent]

http://www.autoweek.com/article/20111126/FREE/111129948


Quote:
Originally Posted by www.autoweek.com

U.S. Grand Prix: The ball is in Ecclestone's court

It has been difficult to explain to non-Formula One fans, or even knowledgeable insiders, what's going on with the 2012 United States Grand Prix, scheduled for just over a year from now at the Circuit of the Americas road course presently under construction in Austin, Texas.

Explaining the situation just became even more difficult.

As most of us in the U.S. were sitting down to Thanksgiving dinner, our iPhones and Blackberries lit up with the latest offer from COTA management, at this point inarguably led by Texas financier Bobby Epstein, with the much-better-known Red McCombs following at a safe distance.

Essentially a Hail-Mary pass to save the 2012 F1 race, the offer has Epstein essentially calling out Formula One chief Bernie Ecclestone, the diminutive 81-year-old British billionaire who controls what tracks and what countries are allowed to host F1 races; when they get them, and how much they will pay for them.

In a meeting several weeks earlier between Ecclestone, Epstein, project president Steve Sexton and project founder Tavo Hellmund at Ecclestone's office, which was first reported by Autoweek, we told you that Ecclestone had provided the group a new contract, since the original contract--issued to Hellmund and his company, Full Throttle Productionsm months earlier--was now invalid because the required fee had not been paid.

Epstein now wanted a new contract, made out to him and his company, because apparently for some reason, he suddenly found having the race contracted to Hellmund's company untenable. Why? No one has said. Was Epstein afraid that Hellmund could move the race to some Texas site other than COTA (he couldn't)? Or was Epstein worried that if the contract wasn't with his own company, he couldn't use it as essentially collateral in an attempt to interest more investors?

By dragging their feet, Epstein and McCombs have caused two problems. Problem one: They've frightened off the Texas politicians such as comptroller Susan Combs and even Gov. Rick Perry, who saw intangible value in bringing a truly premium international racing series to Austin, backed by profoundly tangible value in the money spent by the fans--a large percentage of which would come from outside the U.S. in general, Texas in particular. Combs was ready to use a discretionary fund at her disposal that is expressly designed to help bring major annual events to Texas, such as the Super Bowl. She was ready to give Hellmund, who would then give Ecclestone, $25 million a year to cover Ecclestone's sanctioning fee. The money would be paid back to the state by the extra tax revenue the event would generate.

Well-placed sources suggest that even with Texas fronting the $25 million fee, a Formula One race in Austin would have to stretch to make any money. Without that $25 million, the numbers don't work. But the turmoil between the project backers, and odd and troubling work slowdowns and stoppages on track construction, have spooked comptroller Combs, who now says that she'd look at some sort of payment arrangement, but only after the race, not in advance.

Problem two: Epstein did not realize that the deal cut by Hellmund with Ecclestone--who has been a friend of Hellmund's family for decades--was as sweet as you'll get for a race like this. The contract Ecclestone offered Epstein demanded a larger annual sanctioning fee than Ecclestone required Hellmund to pay--probably by $5 million or $6 million a year. And likely there were terms or escalators for coming years that made Epstein shiver.

Which brings us to the Thanksgiving statement issued by COTA. Read it, and we'll explain what it means:

“Circuit of The Americas has responded to Formula One Management's contract requirements by agreeing to an immediate cash payment of the sanctioning fee for the 2012 United States Grand Prix. In addition, Circuit of The Americas has offered to establish an advance payment schedule for U.S. GP races beyond 2012. The offer comes after several weeks of talks, and once accepted, will secure the U.S. GP on the Formula One race calendar.

“‘We have been ready to send Mr. Ecclestone a sanctioning fee check for some time now,' said Bobby Epstein, founding partner of Circuit of The Americas. ‘He hasn't received it yet because the new contract presented to us two weeks ago contained unrealistic and unfeasible demands. We have signed and returned a contract similar to what we anticipated receiving. This race should be a reality, but if we are going to make the 2012 race date, we must receive a countersignature in the coming few days. We believe the teams, fans, sponsors and local business share our enthusiasm and hope that their voices will be heard.'”

Bottom line: Mr. Ecclestone, we didn't like your contract, so we wrote one we did like. You have a “few days” to sign it, even though you're probably pretty busy down in Brazil staging the last F1 race of the season.

All this would likely leave Ecclestone--as well as Hellmund who, like Epstein, is a “founding partner” of COTA--wondering what was wrong with the original contract, which COTA had months to sign. Hellmund, who has not been bought out of the project, is not part of this latest offer. Reached on holiday, he said he was familiar with this latest offer, “And I wish them luck.”

They'll need it. Play Formula One poker with Bernie Ecclestone and you learn he has four aces in one hand, a full house in the other. Calling his bluff is dangerous, and it appears that is how he took it at a brief press conference in Brazil. “The truth is they are not complying with the terms and conditions of the contract,” Ecclestone reportedly said. “And as we are making the contract, we will award the event or not award the event. They are not awarding anything to us.”

It's also likely that he is chafing over the public assertion that his last contract “contained unrealistic and unfeasible demands,” and is amused and possibly annoyed that Epstein thinks the F1 boss would be moved into giving Austin a race because “the teams, fans, sponsors and local business share our enthusiasm and hope that their voices will be heard.” There was no mention of crippled children, but it's likely the next step.

Ecclestone appears to have three choices:

--He can sign the revised contract, which would keep Austin on the F1 schedule for 2012. And he could impose a rather enormous penalty for any issues that prevent the race from running next year, with those issues being a lack of funding, or even more likely, an incomplete, improper or unsafe racing facility. To bring the COTA to F1 standards by next November would require an absolute, and expensive, frenzy of construction. We're guessing that Ecclestone is guessing that COTA doesn't have the will, or the money, to pull it off. Signing the contract with a healthy penalty for non-performance would be Ecclestone calling COTA's bluff, and he could do it for pure entertainment value.

--He could refuse to sign the contract for 2012, but leave the door open for 2013. That would give COTA plenty of time to complete the track, currently budgeted at about $300 million, but given the past five months of infighting and turmoil, what investor would be willing to ante up the money to complete a track without a signed F1 contract in hand? It's unlikely the terms will get better for COTA than they are right now, unless somehow Hellmund is brought back into the fold.

--He could simply shut down talks with COTA. While Ecclestone and Hellmund seemed to be on the same page, Ecclestone and Epstein apparently are not. In 2013, Ecclestone already has the F1 race in New Jersey debuting, and may consider Texas tainted to the point where it just isn't worth the trouble. And it isn't like it would be hard to fill Austin's slot on the calendar for 2013 and beyond--plenty of places are begging for an F1 race.

So where would that leave COTA? With a $70 million (already spent dollars) construction project that seems sort of limited in potential--what else could you do with it? A resort? A Walmart? Spend another $70 million, and you could likely build a decent track that didn't have F1-level facilities, but would still be a nice place to race. But for who? Aside from F1 and NASCAR Sprint Cup, no other series offers anything more than a long shot at genuine profit. And COTA isn't getting a NASCAR Sprint Cup race, not with Texas Motor Speedway just up the road in Fort Worth fighting to fill its seats twice a year. The only chance that could happen is if NASCAR parent-company International Speedway Corp., or its biggest track-owning partner, Speedway Motorsports Inc., bought COTA, and neither seem to be in a gambling mood in this economy.

By all accounts, just closing down construction and going home would cost millions--a staggering $41 million, according to one estimate--but you'd have to think that in environmentally-conscious Austin, it would take at least half that much to restore the property to something that could be re-purposed.

Once again, the ball is in Ecclestone's court, a soft lob that barely made it over the net. Bernie raises his racquet, swings--and we'll know where that ball goes within the next week.