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From Sport Rider http://www.sportrider.com/news/146_1111_texas_f1_motogp_circuit_in_serious_doubt/index.html
The still-under-construction Circuit of the Americas near Austin, Texas, sent out a press release today stating that it was “suspending further construction of the project until a contract assuring the Formula 1 United States Grand Prix will be held at Circuit of The Americas in 2012 is complete. The race contract between Formula One and Circuit of The Americas has not been conveyed to Circuit of The Americas per a previously agreed upon timetable.” After much fanfare back in April of this year in announcing that the circuit had signed a 10-year contract with Dorna to hold a MotoGP race starting in 2013 (with the announcement of a 10-year contract for F1 signed earlier in May 2010), it appears that the circuit is now in jeopardy of completion—nevermind the ability to host a world championship race.
The work suspension on the circuit is apparently due to a management squabble involving promoter Tavo Hellmund and his Full Throttle Productions company, and the owners/investors of the Circuit of the Americas (COTA), led by billionaire Red McCombs and Robert Epstein of the investment firm Prophet Capital Management, Ltd. According to press reports from CultureMap Houston, a disagreement between COTA and Hellmund has resulted in the money behind COTA’s construction (owners/investors) attempting to buy out Hellmund from the F1 contract. The problem is that Hellmund and Full Throttle Productions were the ones with whom F1 supremo Bernie Ecclestone negotiated the contract—not COTA.
Hellmund and Ecclestone have known each other for more than 30 years. Hellmund spent a good amount of time during the ‘80s working in Europe for Ecclestone’s Brabham F1 team, the period when Nelson Piquet won two World F1 Drivers Championships for the team. So it’s fair to say that Ecclestone would be on Hellmund’s side in any dispute. Thus, COTA’s requests for the contract to guarantee them that the F1 race would indeed happen have fallen on deaf ears.
Reports of a work slowdown during the on-going construction of the facility during the summer ignited yet more rumors of trouble on the horizon. Although all the parties involved denied that anything was wrong, and explanations such as “scheduled work was completed, crews are waiting for next start date” rung as hollow as a petrified steer skull, it was a signal that the big money behind COTA was beginning to sour on the deal.
Adding fuel to the increasingly smoldering rumors was Hellmund’s query to the Texas State Comptroller’s Office regarding the state government’s position on the $25 million in state METF (Major Events Trust Fund) money that was promised annually for the duration of the 10-year contract if there was a management change. The METF is a huge slush fund earmarked for assistance with “major sporting events” (NFL Super Bowl, World Series, etc.) that would result in a huge windfall in local retail and tax revenue. When state comptroller Susan Combs replied that a management change wouldn’t nullify the METF funds, Hellmund’s negotiating power was significantly reduced, further backing him into a corner and prolonging the stalemate.
This resulted in the application for the METF funds being withdrawn back in September. Combs released a statement citing that the “recent announcement of an annual Formula 1 race in New Jersey is a concern, as additional races have the potential to reduce the number of attendees to a Texas race, thereby decreasing the economic impact. Additionally, the reports of a slowdown in construction at the Circuit of the Americas, and recently publicized disagreements between the race rights-holder and the circuit developers have prompted speculation about whether the Austin race will even occur.” Combs was a fervent supporter of the COTA F1 deal, and worked to keep the METF funds earmarked for the race despite coming under fire politically for using the money to assist in bringing the race to Austin. Now it appears she’s changed her stance on helping the circuit, even if a new application for the funds is submitted.
“Let me state clearly: We have not paid out any money for the Formula 1 event,” the statement continues. “The only dollars that can be spent on the United States Grand Prix are tax revenues attributable to the successful running of a race. The state of Texas will not be paying any funds in advance of the event. Further, as is the case with all METF events, each application will be reviewed and analyzed for its likely economic impact and only after the race occurs would any funds be disbursed.”
Thus, if the Formula One contract never gets signed between COTA and Ecclestone, the chances of the circuit being completed—and the MotoGP races that were slated to be held at the facility starting in 2013—are basically slim and none.
Read more: http://www.sportrider.com/news/146_1111_texas_f1_motogp_circuit_in_serious_doubt/index.html#ixzz1e3e46GDL
The still-under-construction Circuit of the Americas near Austin, Texas, sent out a press release today stating that it was “suspending further construction of the project until a contract assuring the Formula 1 United States Grand Prix will be held at Circuit of The Americas in 2012 is complete. The race contract between Formula One and Circuit of The Americas has not been conveyed to Circuit of The Americas per a previously agreed upon timetable.” After much fanfare back in April of this year in announcing that the circuit had signed a 10-year contract with Dorna to hold a MotoGP race starting in 2013 (with the announcement of a 10-year contract for F1 signed earlier in May 2010), it appears that the circuit is now in jeopardy of completion—nevermind the ability to host a world championship race.
The work suspension on the circuit is apparently due to a management squabble involving promoter Tavo Hellmund and his Full Throttle Productions company, and the owners/investors of the Circuit of the Americas (COTA), led by billionaire Red McCombs and Robert Epstein of the investment firm Prophet Capital Management, Ltd. According to press reports from CultureMap Houston, a disagreement between COTA and Hellmund has resulted in the money behind COTA’s construction (owners/investors) attempting to buy out Hellmund from the F1 contract. The problem is that Hellmund and Full Throttle Productions were the ones with whom F1 supremo Bernie Ecclestone negotiated the contract—not COTA.
Hellmund and Ecclestone have known each other for more than 30 years. Hellmund spent a good amount of time during the ‘80s working in Europe for Ecclestone’s Brabham F1 team, the period when Nelson Piquet won two World F1 Drivers Championships for the team. So it’s fair to say that Ecclestone would be on Hellmund’s side in any dispute. Thus, COTA’s requests for the contract to guarantee them that the F1 race would indeed happen have fallen on deaf ears.
Reports of a work slowdown during the on-going construction of the facility during the summer ignited yet more rumors of trouble on the horizon. Although all the parties involved denied that anything was wrong, and explanations such as “scheduled work was completed, crews are waiting for next start date” rung as hollow as a petrified steer skull, it was a signal that the big money behind COTA was beginning to sour on the deal.
Adding fuel to the increasingly smoldering rumors was Hellmund’s query to the Texas State Comptroller’s Office regarding the state government’s position on the $25 million in state METF (Major Events Trust Fund) money that was promised annually for the duration of the 10-year contract if there was a management change. The METF is a huge slush fund earmarked for assistance with “major sporting events” (NFL Super Bowl, World Series, etc.) that would result in a huge windfall in local retail and tax revenue. When state comptroller Susan Combs replied that a management change wouldn’t nullify the METF funds, Hellmund’s negotiating power was significantly reduced, further backing him into a corner and prolonging the stalemate.
This resulted in the application for the METF funds being withdrawn back in September. Combs released a statement citing that the “recent announcement of an annual Formula 1 race in New Jersey is a concern, as additional races have the potential to reduce the number of attendees to a Texas race, thereby decreasing the economic impact. Additionally, the reports of a slowdown in construction at the Circuit of the Americas, and recently publicized disagreements between the race rights-holder and the circuit developers have prompted speculation about whether the Austin race will even occur.” Combs was a fervent supporter of the COTA F1 deal, and worked to keep the METF funds earmarked for the race despite coming under fire politically for using the money to assist in bringing the race to Austin. Now it appears she’s changed her stance on helping the circuit, even if a new application for the funds is submitted.
“Let me state clearly: We have not paid out any money for the Formula 1 event,” the statement continues. “The only dollars that can be spent on the United States Grand Prix are tax revenues attributable to the successful running of a race. The state of Texas will not be paying any funds in advance of the event. Further, as is the case with all METF events, each application will be reviewed and analyzed for its likely economic impact and only after the race occurs would any funds be disbursed.”
Thus, if the Formula One contract never gets signed between COTA and Ecclestone, the chances of the circuit being completed—and the MotoGP races that were slated to be held at the facility starting in 2013—are basically slim and none.
Read more: http://www.sportrider.com/news/146_1111_texas_f1_motogp_circuit_in_serious_doubt/index.html#ixzz1e3e46GDL
