hairy_scotsman wrote:I don't recall Bernie ever saying COTA was willing to meet Tavo's obligations (maybe you can point me to that).
Explaining how the situation has spiralled, Ecclestone said: "We had an agreement with Full Throttle Productions [Tavo].
"Everything was signed and sealed, but we kept putting things off like the dates, various letters of credit and things that should have been sent, but nothing ever happened.
"Then these other people (COTA) came on the scene, saying that they wanted to do things, but that they had problems with Tavo.
"They said they had the circuit, and that they wanted an agreement with me. I told them they had to sort out the contract with Tavo, which they said they would.
It seems apparent that the deal was set up like this: Tavo was awarded the rights to the race in return for a $25M annual fee, to be paid in June of each year. The money was to come from the Texas events fund. There's no indication at all that COTA was ever to be responsible for Bernie's fee - that was Tavo's deal, and it was the sole asset that he brought to the table.
Let me repeat that, in bold, since it seems to be the origin of the argument against COTA:
There's no indication at all that COTA was ever to be responsible for Bernie's fee - that was Tavo's deal, and it was the sole asset that he brought to the table.
COTA were not Tavo's backers. They were his clients -
huge difference. COTA and Full Throttle are two separate entities. Full Throttle owns the rights and is responsible for paying for them, and I've seen nothing to suggest that McCombs or Epstein have any investment in Full Throttle.
COTA's job was to provide the venue. Certainly we can assume that they would pay Tavo a fee to hold the GP, but unfortunately we don't know anything of what that fee was to be, or how and when it was to be paid. Perhaps it has already been paid? From Tavo's comments, it seems that the fee was being paid in installments. But really we don't know. If you're suggesting that Tavo was counting on this fee to pay Bernie, then I think you're overestimating the fee by a tremendous margin. And there's no indication that COTA was in arrears on their payment. Tavo said at one point that he hadn't been paid in a few months, but that could well have been because Bernie had already cancelled his contract, and there was nothing to pay for.
If we take Bernie at his word, we can surmise that the contract required a bond of sorts to be put in place to guarantee his fee, and that Tavo was having difficulty providing it. We're guessing here, of course, but it seems logical, since Tavo's only backing was the state's events fund and we've learned that promises from the Texas comptroller concerning that fund apparently aren't all that binding. So someone had to come in and provide the backing in order to get a bond, and the obvious someone was COTA. (I say COTA because Bernie did. Other sources say that it's either Epstein himself or his investment company Prophet who are going to be the investor.)
So, we could bicker over what Bernie means by "they had problems with Tavo" - perhaps he picks his nose in front of visitors, or perhaps they just had problems with him maintaining ownership of the rights after they paid the fee for him. But it's really irrelevant. The point is that without the state's money, Tavo couldn't pay Bernie's fee, and if COTA was going to step in and pay for the rights to the race, they wanted ownerships of those rights. Entirely reasonable. And of course, if they owned the rights, then what is Tavo doing there? So I don't buy the whole 'they wanted to cut Tavo out of the deal' line of thought. Tavo's raison d'etre was to provide the rights, and if he didn't have the rights, he simply had no reason to be involved. This is America, specifically Texas, and when the sum in question is $25million, hardball will be played. Tavo is a whiffle ball sort of fella.
OK, so you ask why didn't they just pay the fee that Tavo had agreed to? Well, I'd think that much is obvious, but it seems that they just couldn't come to terms with Tavo. They had to buy him out, and apparently they were negotiating to do so up until the moment Bernie cancelled Tavo's contract. Any guess as to why they couldn't agree is just wild speculation, but whatever the reason, obviously Tavo thought the contract was worth more than COTA did. Regardless, they'd be the biggest fools in the universe if they handed Bernie a check for $25 million without first securing the rights. Portraying this as COTA "withholding payment" is, well...
And as for COTA, or Epstein, not having the money? Epstein (Prophet) could write a $25 million check to Bernie each and every day for the next year and still be solvent. Red McCombs could do the same. Take a look at COTA's executive team and compare the background of everyone compared to Tavo. Then tell me that they don't know what they're doing.
The NJ race has been in the works for years, longer than Austin, and people have known about it. It wasn't a surprise to any involved parties.
Apparently it was to the Republic of Texas. Susan Combs explicitly named it as one of the reasons she decided not to advance the money.
My point, though, wasn't that it was a surprise, but rather that having that event in his pocket puts Bernie in a better bargaining position with Austin. In other words, it was in Bernie's interest that Tavo's contract be canceled.
She even went as far as to say it isn't a Tavo problem, but instead it's an investor problem.
Because Tavo isn't involved any more. He's out, and has been since Bernie cancelled his contract.
Is it not fair to question Epstein's good faith here?
In what regard? You think he wanted Bernie to cancel Tavo's contract? You think Epstein thought that he could negotiate a better deal with Bernie after New Jersey than before?
This man?
