COTA Austin - construction and infrastructure

[WhiteBlue]

Hellmund brought a $25M/year asset...the METF funding. You're ignoring the several years of work Hellmund actually did and the relationships he has that made this deal a reality and attempting to spin it as if it all just fell into his lap. It didn't, and without Hellmund, there would be no CoTA. It's as simple as that.

Exactly. Everybody including Epstein and McComb testified that the race in Austin and the business model that enables it is entirely the brain child of Hellmund. To call him a profiteer is ludicrous. He invested a lot of intellectual property which certainly is not worthless.

I would rather say the opposite is true. Due to a technicality that wasn't forseen in the contract of association the investors tried to squeeze out the original inventor and promoter of the race without a suitable compensation. IMO this was an attempt at an unfriendly take over that failed very badly because they misjudged Bernie Ecclestone. You can bet the farm that Hellmund is not unhappy about the contract that was signed. I will eat my old sock if we hear a complaint from him about the way Bernie protected his position and interest.

[Pup]

Admittedly it is a presumption but it would appear that Bernie managed to squeeze a few more bob out the deal.

Probably, though I imagine we'll never know for sure. We know that both sides were confident enough in their hands to hold out until the last minute, so to just shrug off COTA's tactics as if Epstein and McCombs are naive rubes as has been argued is, I think, too simplistic. They are both shrewd businessmen who have been equally as successful in their fields as Bernie has been in his. So I remain skeptical. And even if the fee did go up, the advantages to COTA of controlling their own destiny and not having an extra mouth to feed might still make it a better deal for them.

Actually Bernie said that they had to take his contract or leave it.

And COTA said that Bernie had to take their contract or leave it.

The BBC reported that the initial race fee had gone up from $25m to $35m.

The BBC reported rumors that the initial race fee had gone up from $25m to $35m. Even if true, what are the terms going forward? Could it be a higher base fee, but a lower annual increase?

Epstein said that Bernie was a masterful negotiator.

And if they 'won' the negotiation, you expect them to call Bernie a poor negotiator?

If you ask me, everybody who thinks that CotA paid the price of the earlier contract with Tavo lives in cloud cuckoo land.

Again with the insults. Shameful.

[Pup]

Everybody including Epstein and McComb testified that the race in Austin and the business model that enables it is entirely the brain child of Hellmund. To call him a profiteer is ludicrous. He invested a lot of intellectual property which certainly is not worthless.

I think you've got a pretty broad definition of "intellectual property". The kind of value Tavo ended up bringing to the deal is deserving of a consulting fee, not a seat at the table. Maybe it's different in Europe, though I doubt it - but in the US, capital is king, and if you aren't putting money in the pot, you just aren't part of the deal.

I think that what Tavo was supposed to bring to the table was the GP. That was to be his asset, his capital. But as it turned out, he hadn't yet secured it. The problems between COTA and Tavo seem to have arisen when Bernie asked for a bond to cover the race fee, which Tavo then asked COTA to provide. In that scenario, Tavo was essentially asking them to buy something for him (and then turn around and lease it from him!) and there's just no way that deal could fly.

Now, there's two ways of looking at what happened next in this scenario - either COTA tried to buy out Tavo, and he refused, or at least refused to sell at a reasonable price; or they didn't bother to try to buy him out and instead made a back room deal with Combs to take away Tavo's funding and force him to default on the contract. I could see it either way, really.

The answer, I think, hinges on who had the better motive to cancel the contract. Bernie by then had New Jersey and so perhaps thought that he could now negotiate a better deal, particularly now that he was dealing with men who actually had money. That seems the obvious choice, but I could also see it the other way. After all, Tavo's contract seems like a good deal at first glance, but if you do believe Sylt's figures (a painful proposition for me, to be sure), then it's obvious that in the long run, the deal was pretty lousy. So perhaps it was in the best interest of COTA to get it cancelled.

I still lean toward the first scenario, but the more I think about the way that the state funding withdrawal seemed to have completely blindsided both Tavo and Bernie, the more I think that the latter might well be true. But I think that unless Combs tells us her reasoning for saying she could care less who ran the race one day and then taking away the money the next, we'll never know.

[hairy_scotsman]

I think you've got a pretty broad definition of "intellectual property". The kind of value Tavo ended up bringing to the deal is deserving of a consulting fee, not a seat at the table. Maybe it's different in Europe, though I doubt it - but in the US, capital is king, and if you aren't putting money in the pot, you just aren't part of the deal.

If that's true, then why is he part of the deal? Why did he get a seat at the table in the first place?

Until last Wednesday, Hellmund's photo was the first appearing as a Founding Partner on the CoTA "Team" page of their site. Then his was taken down. Sexton was asked about this off the record by a reporter. He told him that he didn't know why the photo was down, and said he'd have the techs look at it, and that they were executing some changes to the site.

On Monday or Tuesday, McCombs' picture also disappeared and the name of the page was changed to "Staff", showing only the President, VP, CFO, & CMP. That's interesting, because from what I've heard Hellmund has not yet been bought out of anything. It's also funny because there's room enough on that page for 5 more photos of that size, enough for the rest of the CoTA Staff.

Now, there's two ways of looking at what happened next in this scenario - either COTA tried to buy out Tavo, and he refused, or at least refused to sell at a reasonable price; or they didn't bother to try to buy him out and instead made a back room deal with Combs to take away Tavo's funding and force him to default on the contract. I could see it either way, really.

Tavo already said he offered to buy them out and they refused and returned the offer. He also gave a hint at what they offered when he said if they had offered "even less than 10% of that ($39M), I'd be in Tahiti working on my tan". Do you really believe that what Hellmund brought to the table ($25M/year from the METF, the F1 rights at a relatively cheap rate, MotoGP, V8SC, and the contacts to easily bring in more series and the top motorsports pros) isn't even worth $3.9M?

Combs didn't take away the advance payment until well after Hellmund's F1 rights were voided, so that can't be used as an excuse for the non-payment of the rights. The rights were brought to the deal by Hellmund, but they belonged to CoTA (of which Hellmund was a partner and still is to my knowledge). They weren't defaulted on by Tavo alone. They were defaulted on by CoTA as a group when the investors failed to pay for them, and the loss of the advance payment did nothing to Tavo in regard to the rights, because they were already lost. It did put a hell of a lot of pressure on the CoTA investors though.

[bill shoe]

Tavo already said he offered to buy them out and they refused and returned the offer. He also gave a hint at what they offered when he said if they had offered "even less than 10% of that ($39M), I'd be in Tahiti working on my tan". Do you really believe that what Hellmund brought to the table ($25M/year from the METF, the F1 rights at a relatively cheap rate, MotoGP, V8SC, and the contacts to easily bring in more series and the top motorsports pros) isn't even worth $3.9M?

I think this gets to why I am unimpressed with Tavo. The answer to your question is "Yes, it was clearly worth at least $3.9 million."

The better question is "Did Tavo earn the quarter-billion dollars that Texas allowed him to control?" He did successfully lobby the government and I'm sure that in it's own way this took time/skill/etc. Yet Tavo did not win an open and transparent bidding process with Texas, much less did he earn the money himself.

He is skilled in a way that does not impress me.

[Pup]

If that's true, then why is he part of the deal? Why did he get a seat at the table in the first place?

At the risk of repeating myself...

I think that what Tavo was supposed to bring to the table was the GP. That was to be his asset, his capital. But as it turned out, he hadn't yet secured it. The problems between COTA and Tavo seem to have arisen when Bernie asked for a bond to cover the race fee, which Tavo then asked COTA to provide. In that scenario, Tavo was essentially asking them to buy something for him (and then turn around and lease it from him!) and there's just no way that deal could fly.

Tavo already said he offered to buy them out and they refused and returned the offer. He also gave a hint at what they offered when he said if they had offered "even less than 10% of that ($39M), I'd be in Tahiti working on my tan". Do you really believe that what Hellmund brought to the table ($25M/year from the METF, the F1 rights at a relatively cheap rate, MotoGP, V8SC, and the contacts to easily bring in more series and the top motorsports pros) isn't even worth $3.9M?

Yes. If Tavo hadn't secured the GP, then all he brought was his relationship to Bernie. Plus, his GP deal doesn't seem to be all that. And what, exactly, did he offer COTA to buy them out? Spare change from under the couch cushions? If it was a real offer, then who was the backer, and why wasn't that backer willing to pay Bernie's fee?

[hairy_scotsman]

If that's true, then why is he part of the deal? Why did he get a seat at the table in the first place?

At the risk of repeating myself...

I think that what Tavo was supposed to bring to the table was the GP. That was to be his asset, his capital. But as it turned out, he hadn't yet secured it. The problems between COTA and Tavo seem to have arisen when Bernie asked for a bond to cover the race fee, which Tavo then asked COTA to provide. In that scenario, Tavo was essentially asking them to buy something for him (and then turn around and lease it from him!) and there's just no way that deal could fly.

Tavo already said he offered to buy them out and they refused and returned the offer. He also gave a hint at what they offered when he said if they had offered "even less than 10% of that ($39M), I'd be in Tahiti working on my tan". Do you really believe that what Hellmund brought to the table ($25M/year from the METF, the F1 rights at a relatively cheap rate, MotoGP, V8SC, and the contacts to easily bring in more series and the top motorsports pros) isn't even worth $3.9M?

Yes. If Tavo hadn't secured the GP, then all he brought was his relationship to Bernie. Plus, his GP deal doesn't seem to be all that. And what, exactly, did he offer COTA to buy them out? Spare change from under the couch cushions? If it was a real offer, then who was the backer, and why wasn't that backer willing to pay Bernie's fee?

1) Epstein refused Tavo's buyout offer. How do you come to the conclusion that there was a fee that Tavo's buyout backer wouldn't pay?

2) Yet again you discount the $25M/year that Tavo brought to the table. LOL.

3) Tavo did bring the GP to CoTA. Everyone knew he wasn't paying for it, except for you, I guess. The rights became the property of CoTA (including Hellmund) when the partnership was formed. The rights were lost when the money men didn't pay up.

What do you think Tavo is talking about here?

The money part has never been my role. If I'd had the money I wouldn't have been willing 18 months ago to give up the majority of my project.

He's talking about sharing the F1 rights.

[WhiteBlue]

Hairy, there is no point to argue with Pup when he is in that mood. IMO, he knows very well that his position makes no sense and loves arguments to wind people up.

I'm very confident that the particular story will come out when the time is right. In the meantime further dispute is fruitless. I suggest we wait until a reliable source will confirm Epstein's screw up.

The good news is that we have a go for the GP and as it looks now it will happen.

[Pup]

1) Epstein refused Tavo's buyout offer. How do you come to the conclusion that there was a fee that Tavo's buyout backer wouldn't pay?

2) Yet again you discount the $25M/year that Tavo brought to the table. LOL.

3) Tavo did bring the GP to CoTA. Everyone knew he wasn't paying for it, except for you, I guess. The rights became the property of CoTA (including Hellmund) when the partnership was formed. The rights were lost when the money men didn't pay up.

What do you think Tavo is talking about here?

The money part has never been my role. If I'd had the money I wouldn't have been willing 18 months ago to give up the majority of my project.

He's talking about sharing the F1 rights.

1) The fee for the GP. Tavo lost his contract when the money wasn't paid (according to Bernie), so why didn't this 'backer' pay the fee so that they wouldn't lose the only asset they had? Why is COTA to blame, if Tavo had other sources for the money and still failed to pay up?

2) Tavo said that didn't even know the events fund existed when he talked to Combs the first time. She told him to come back with investors. Once McCombs was involved, they got the money. So who brought the $25M to the table? Do you really think that the state would guarantee Tavo that money if the COTA boys weren't there to add a little reality to his pipe dream?

3) You say the rights were assigned to COTA, yet somehow according to Bernie they still needed to buy those rights from Tavo. Which is it?

[Pup]

Hairy, there is no point to argue with Pup when he is in the right.

Fixed that for you.

You seem to have little to offer these boards recently other than insults. Odd, for someone who hides behind the mods' skirts every time his feelings gets hurt.

[hairy_scotsman]

1) The fee for the GP. Tavo lost his contract when the money wasn't paid (according to Bernie), so why didn't this 'backer' pay the fee so that they wouldn't lose the only asset they had? Why is COTA to blame, if Tavo had other sources for the money and still failed to pay up?

CoTA is to blame because they took on that role when they entered the partnership with Hellmund.

2) Tavo said that didn't even know the events fund existed when he talked to Combs the first time. She told him to come back with investors. Once McCombs was involved, they got the money. So who brought the $25M to the table? Do you really think that the state would guarantee Tavo that money if the COTA boys weren't there to add a little reality to his pipe dream?

Link? At any rate, Hellmund brought relationships with the latest two comptrollers and successfully lobbied Kirk Watson for a change in the legislation to include F1 racing in the METF's parameters. There was never going to be any METF $$ if the project obviously had no legs regardless of who the investors were, but again, everyone knew that. Without Tavo, however, it never would have even been a consideration. Again, no Tavo, no METF $$ for CoTA.

3) You say the rights were assigned to COTA, yet somehow according to Bernie they still needed to buy those rights from Tavo. Which is it?

They wanted the rights outright. Bernie told them to go deal with Tavo (buy out his share of the rights). It seems that they instead tried a different route.

You make this seem difficult when it's very simple....and you continue attempting to discredit his role in the very project he created, which quite simply would never have existed without him. Not sure why, but it just doesn't work.

[bhall]

For the love of Jah...

[xpensive]

Wiki is your friend;

The term (profiteering) is also applied to businesses that play on political corruption to obtain government contracts.

Is it just me, or is the above definition a pretty close description of one of the players in the Austin GP saga?

[Pup]

Ok, HS, you win, just out of pure stamina. I've laid out my opinion as clearly as I can and this seems to have devolved on your and WB's part to just repitition and playground taunts. And since no one else seems to be interested in any of this, there's really no point in continuing.

[WhiteBlue]

Fixed that for you.

Oh, you are out again with the old quote falsification. Its getting boring. Talking about playground taunts......