COTA Austin - construction and infrastructure

[WhiteBlue]

What I think gets lost in all the hoopla is that no American business group, read that lawyers, would agree the the type of deal/contract Bernie demands. The cost is substantial and grows yearly with very little chance to realize any tangible moneys.
Sure there is that increase in hotel sales and all that goes with a bunch of people coming to town...But actual cash profit for the organisers and promoters and track owners is next to or nil.
Plus as I've said, I think Bernie used Austin. He's not hidden his desire to have a race in New York and when this Jersey thing came up, which I think was a total knee jerk reaction to the Texas race, Bernie was more than happy to get rid of what he sees as yokels in Texas.

That is a very strange interpretation of the facts that we know. There is a ton of evidence that Bernie and the teams want Austin and two GPs. Bernie helped Tavo with a deal that was clearly below the average race fee and he is known to have stood by that deal for ages although Epstein and CotA did not pay in time. AFAIK Bernie held that price constant and the contract open for more than four months.

There is no real coincidence of the New Jersey deal and the Austin deal going bad as you seem to think. Bernie never "dropped" the Austin deal. He only changed the contract on offer when it became clear that Hellmund, his initial business partner was going to be ousted from the company that he founded. Bernie apparently offered less favourable terms which is understandable after Epstein was dumb enough not to execute the special low offer for many months. The fact that Bernie got ink on the Jersey deal might have influenced the price, but that is a very natural reaction to the market events. It still doesn't mean that Bernie wanted or wants the Austin GP to fail.

If anybody acted like an elephant in the porcelain shop it is Epstein. And if the Austin GP fails I think it is mainly his stupidity and ignorance that is to blame. He hasn't got a clue what a lucky deal Hellmund got in the first place and what the market rate usually is. And he must be pretty ignorant to think that he can publicly dictate terms to Bernie. A 12y/o who has followed F1 for one year knows that this is the quickest way to ruin all your chances to get a deal.

[strad]

You seem to forget the price goes UP every year of the contract. NOBODY but Bernie gets to make money...all the others get is the somewhat questionable prestige of hosting a race FOR Bernie.

[WhiteBlue]

You seem to forget the price goes UP every year of the contract. NOBODY but Bernie gets to make money...all the others get is the somewhat questionable prestige of hosting a race FOR Bernie.

I'm not forgetting anything. I'm just telling it as it is. Austin had a tailor made contract that even gave them relative lower than average sanctioning fees during their initial weak earning opening years. So if they managed it correctly the METF money would have covered the fee in the first two years. In the followeing years the increasing attendance and other events and businesses would have given them more revenues which could have been used generate some profits for the investors.

I estimate that by year four or five they could have turned a tidy profit. The Circuit of the Americas was set to see all kind of events from F1, MotoGP, ALMS and potentially even NASCAR over the long run. If you have an excellent facility that also produces good racing it can attract a wide range of events. Together with track days, music and corporate events the circuit could have been very busy.

But all that hinges on successfully closing an F1 deal. They blew it and they will have to carry the blame.

In one way I do agree with people who criticize Bernie. His fees are generally too high. But that applies to all circuits and many of them do not have the benefit of $25m per race from a METF. This is why the criticism isn't applicable in this case.

[hairy_scotsman]

What I think gets lost in all the hoopla is that no American business group, read that lawyers, would agree the the type of deal/contract Bernie demands. The cost is substantial and grows yearly with very little chance to realize any tangible moneys.
Sure there is that increase in hotel sales and all that goes with a bunch of people coming to town...But actual cash profit for the organisers and promoters and track owners is next to or nil.
Plus as I've said, I think Bernie used Austin. He's not hidden his desire to have a race in New York and when this Jersey thing came up, which I think was a total knee jerk reaction to the Texas race, Bernie was more than happy to get rid of what he sees as yokels in Texas.

The Jersey race has been in the works for years. Longer even than the Austin race. Was the timing of the NJ announcement altered due to the Austin non-payment? Possibly, but Bernie wants both races. Evidence enough, imho, are the multiple private warnings and multiple extensions given the Austin investors over a period of several months in response to their lack of payment.

[hairy_scotsman]

What I think gets lost in all the hoopla is that no American business group, read that lawyers, would agree the the type of deal/contract Bernie demands. The cost is substantial and grows yearly with very little chance to realize any tangible moneys.
Sure there is that increase in hotel sales and all that goes with a bunch of people coming to town...But actual cash profit for the organisers and promoters and track owners is next to or nil.
Plus as I've said, I think Bernie used Austin. He's not hidden his desire to have a race in New York and when this Jersey thing came up, which I think was a total knee jerk reaction to the Texas race, Bernie was more than happy to get rid of what he sees as yokels in Texas.

That is a very strange interpretation of the facts that we know. There is a ton of evidence that Bernie and the teams want Austin and two GPs. Bernie helped Tavo with a deal that was clearly below the average race fee and he is known to have stood by that deal for ages although Epstein and CotA did not pay in time. AFAIK Bernie held that price constant and the contract open for more than four months.

There is no real coincidence of the New Jersey deal and the Austin deal going bad as you seem to think. Bernie never "dropped" the Austin deal. He only changed the contract on offer when it became clear that Hellmund, his initial business partner was going to be ousted from the company that he founded. Bernie apparently offered less favourable terms which is understandable after Epstein was dumb enough not to execute the special low offer for many months. The fact that Bernie got ink on the Jersey deal might have influenced the price, but that is a very natural reaction to the market events. It still doesn't mean that Bernie wanted or wants the Austin GP to fail.

If anybody acted like an elephant in the porcelain shop it is Epstein. And if the Austin GP fails I think it is mainly his stupidity and ignorance that is to blame. He hasn't got a clue what a lucky deal Hellmund got in the first place and what the market rate usually is. And he must be pretty ignorant to think that he can publicly dictate terms to Bernie. A 12y/o who has followed F1 for one year knows that this is the quickest way to ruin all your chances to get a deal.

Exactly.

No Tavo? No discounted fee.

Cutting Tavo out of the deal by withholding payment and forcing Bernie to void Tavo's rights contract was simply the height of idiocy.

[hairy_scotsman]

You seem to forget the price goes UP every year of the contract. NOBODY but Bernie gets to make money...all the others get is the somewhat questionable prestige of hosting a race FOR Bernie.

I'm not forgetting anything. I'm just telling it as it is. Austin had a tailor made contract that even gave them relative lower than average sanctioning fees during their initial weak earning opening years. So if they managed it correctly the METF money would have covered the fee in the first two years. In the followeing years the increasing attendance and other events and businesses would have given them more revenues which could have been used generate some profits for the investors.

I estimate that by year four or five they could have turned a tidy profit. The Circuit of the Americas was set to see all kind of events from F1, MotoGP, ALMS and potentially even NASCAR over the long run. If you have an excellent facility that also produces good racing it can attract a wide range of events. Together with track days, music and corporate events the circuit could have been very busy.

But all that hinges on successfully closing an F1 deal. They blew it and they will have to carry the blame.

In one way I do agree with people who criticize Bernie. His fees are generally too high. But that applies to all circuits and many of them do not have the benefit of $25m per race from a METF. This is why the criticism isn't applicable in this case.

Again, EXACTLY.

Epstein shot himself in the foot when withholding payment to void Tavo's contract.

[strad]

I estimate that by year four or five they could have turned a tidy profit

As usual..You Are Wrong ,,,You're estimate..
You can estimate all you want but it's been this way for years...Bernie gets the money, everyone else gets the shaft.
.
Hairy...I'd have loved for this to pan out, and who knows it may still, but other than Bernie the only one to get anything out of it is Austin tourism cats, Bernie and us in the U.S. who want a home race either to go to or just being on the map. An F1 race is NOT a money maker in itself.

[bhall]

With METF money, the only obstacle to turning a profit is their business acumen. (Which, at this point, would seem to indicate insurmountable odds.)

[strad]

The way I see it the METF money will not even cover the cost of buying the race from Bernie,,ESPECIALLY a few years down the road when the cost will have gone up by close to 25%
I didn't know I was starting an arguement. Believe what you will. I truly hope they get their act together and have the race in Austin..I love Texas and Texans (my dad was one), but I reserve the right to be sceptical...especially in light of what we have learned in the last 10 to 15 years about Bernies demands and the unsustainability of any F1 race. Consider that Australia, for one, is saying they just cant afford or rationalize hosting the race..IF a country can't afford it,,,how can any lowly businessman?

[Scorpaguy]

Making money was likely never an option. Rather, IMHO, Tavo thought his contract would allow the event to break even...while the general area got a tourism-based cash infusion. Its a shame as I think Austin migh thave been able to pull this off....its a rather "uppity" lot that enjoys the cheese/wine/martini scene. Not your typical southern city. Combined with the motorsport loving southerners in close proximity...I think Texas could have made it work. I fear BE is pissed and its all over now.

[hairy_scotsman]

Making money was likely never an option. Rather, IMHO, Tavo thought his contract would allow the event to break even...while the general area got a tourism-based cash infusion. Its a shame as I think Austin migh thave been able to pull this off....its a rather "uppity" lot that enjoys the cheese/wine/martini scene. Not your typical southern city. Combined with the motorsport loving southerners in close proximity...I think Texas could have made it work. I fear BE is pissed and its all over now.

I think what he was looking for was for the F1 event to break even or do a little better, and for that event to be the circuit's "anchor" event, drawing other racing series with MUCH lower sanctioning fees, whose events would make money.

[hairy_scotsman]

I estimate that by year four or five they could have turned a tidy profit

As usual..You Are Wrong ,,,You're estimate..
You can estimate all you want but it's been this way for years...Bernie gets the money, everyone else gets the shaft.
.
Hairy...I'd have loved for this to pan out, and who knows it may still, but other than Bernie the only one to get anything out of it is Austin tourism cats, Bernie and us in the U.S. who want a home race either to go to or just being on the map. An F1 race is NOT a money maker in itself.

As do many others, you seem to be making the mistake of equating the prospects of the circuit with its potential to profit from just the F1 event. All that matters is the bottom line, and the path to the bottom line goes through many other events.

[hairy_scotsman]

Turning up the heat:

http://www.autosport.com/news/report.php/id/96526

"Everybody will be happy with that I believe," said Ecclestone when asked about the prospect of there being just 19 races. "The teams complain there are too many races, so we will solve the problem."

Ecclestone reiterated that Bahrain and Korea would both be a part of the 2012 schedule, despite uncertainty about the events.

On Korea Ecclestone said: "Yeah, we have a contract with them. They have got a contract and we will be there."

Regarding Bahrain, Ecclestone said he had not yet read the 500-page report into the unrest that was published this week, but said there were no doubts the race would go ahead.

"We have a contract with Bahrain. We will be there."

When asked about the latest news on Austin, Ecclestone said: "I've no idea. He [circuit chief Bobby Epstein] was supposed to have come back with confirmation on things which he has failed to do."

[strad]

Regarding Bahrain, Ecclestone said he had not yet read the 500-page report into the unrest that was published this week, but said there were no doubts the race would go ahead.

How very typical.

[Pup]

Bernie saying that he's OK with 19 races is pretty funny. He'd have 52 if the teams would let him. IMO, it just shows that he's shaking Austin down for more money. He probably used the Austin race to get the New Jersey boys to finally agree to his terms, and now he's using the Jersey race to do the same to Austin. I think he's just awfully, uh, lucky that he found himself with a longtime friend who could default on the contract and allow him to renegotiate.