USGP organizers face commission questioning…and laughs

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Securing the rights to host an F1 race is no easy task and I won’t marginalize how difficult the negotiations must be with FOM’s Bernie Ecclestone and the CVC. Look at what it took for Silverstone to host the event as an example.

When Tavo Hellmund finally secured the rights for the United States Grand Prix in Austin, I doubt he was expecting a cake walk in negotiations with local and state governments but as with many things in the US, litigation is the means of extortion and today’s video seems to set the ground work for what Tavo and friends will be facing int he coming months.

No doubt all of the issues need to be addressed but in the end, track economics have to work. If the construction of a purpose-built circuit was estimated at $200 million, with some State participation expected as an additional investment due to the economic impact desired in return, you can imagine that securing the rights to several racing series and races is needed to make the economics work.

I have no inside information on how Ecclestone works but it has long been rumored that the money made during the F1 event is mostly carried away in a large bag by Ecclestone leaving the local track owners and promoters precious little in revenue. Most of the potential revenue stream during a grand prix weekend are thought of and secured by FOM/CVC and Ecclestone has perfected this process.

If the local commission is intent on micromanaging the circuit’s every nuance and require the most overreaching contingency plans with expected resources for every possible issue, the cost of the circuit will dramatically raise and become an untenable proposition for the investors.

Certainly the impact of a purpose-built circuit has to be considered. Traffic, safety, environmental impact et. al but there are a host of things the local commission can come up with to further their agenda as well.

If there is any danger to the USGP happening in 2012 or happening at all, it will be the litigation and hurdles the local and state government places before Tavo and friends. Let’s hope this is kept to a minimum and they can actually break ground in December…even though the council members were laughing at the prospect.


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