It had to come to this. Formula One boss Bernie Ecclestone has told promoters for the inaugural US Grand Prix in Austin, Texas — scheduled for November 2012 — to pay up by next week or the race will be cancelled.
“It’s all very simple — they don’t have the money,” Ecclestone told The Associated Press. “We don’t have a contract. If they want to come back to us, if it’s not signed before the end of next week, I suppose it won’t be on the calendar next year.”
Texas Formula One Race in Peril | The Globe and Mail. The self-titled “commercial rights holder” for F1 said his patience with organizers of the race had run out and he was not prepared to wait beyond the season-ending Brazilian Grand Prix in São Paulo on 27 November.
Thus we have the sad end to a truly bizarre fiasco. Announced with much fanfare in May 2010, the USGP was to have been held at a new, purpose-built track designed by Hermann Tilke, dubbed Circuit of the Americas (COTA). Full Throttle Productions and CEO Tavo Hellmund assured they would finance all construction privately, but then turned around and demanded US$25M annually from state coffers to cover the licensing fee to Ecclestone’s Formula One Management Ltd. (FOM). That’s when things went astray, first with litigation and then — after dirt had been moved around and a Red Bull driven by David Coulthard navigated the still tarmac-less circuit — with push back from Texas state officials. So there won’t be $25M paid to FOM and there won’t be a USGP at Austin. Even the Web site formula1unitedstates.com has disappeared, redirected to the official F1 site.
We have not paid out any money for the Formula 1 event. 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.
While Hellmund had a contract with FOM, apparently that was quietly terminated some months ago due to breach. Reports suggest that there’s been a falling out between the COTA folks and Hellmund, but that it is Tavo who has “family ties” to Ecclestone. And without any publicity at all the organizers’ request for $25M from that special Texas state fund was inexplicably withdrawn in September, never re-submitted.
All of this speaks volumes about the current state of commercialism in Formula One. There is no way Western governments are going to foot the huge up-front payments Bernie demands for the privilege of hosting a GP race. This author never thought city or state officials would agree to cover the costs of staging a race. Who Wudda Thunk It? | Formula One Art & Genius. That is what has led to the demise of the Austrian, French, Dutch and other “traditional” European races. It’s also why F1 runs before empty stands in opulent, rich but nowhere places like Bahrain and Abu Dhabi. Even the Koreans, who gladly paid FOM’s admission price for their first GP in 2010, are already saying they can no longer afford to stage the race because they are losing money.
This season saw the spectacle of a new Grand Prix and circuit being unveiled in India and was the first year more GP races were held in Asia than Europe. But few if anyone cares about F1 in India and its economy is plainly unsuited to the interests of F1 sponsors. Circuits and host nations are increasingly becoming — if they are not already — just a big television studio for broadcasting F1 races around the globe. No one cares where they are held, so long as the couch potatoes get to watch and FOM gets paid.
That is terribly sad and quite unsustainable. But it reflects the reality of Formula One in the 21st century. Have money and the F1 circus will fall all over you. Wherever you are. But without the bucks, don’t even think about asking Ecclestone for as favor.
The worst part, of course, is that after the Indianapolis Motor Speedway built a great F1 circuit and hosted wonderful races for years, FOM drove the USGP away with these same sort of escalating licensing fee demands. Now it has done the same thing again. The U.S. Grand Prix has a long and colorful history in Formula One and it is a real shame that American F1 fans will, for the 5th year running, have no event to attend in America.