No amount of clever talking will disguise the fact that Hellmund's contribution to the partnership wasn't financial or capital input. That was largely Epstein's and McComb's role.
Pup's theory that Full throttle production was to pay the F1 fee completely out of the METF money is unrealistic. The fee was always higher than the METF contribution over the long run.
Formula Money quoted by F1fanatic.co.uk
http://www.f1fanatic.co.uk/2009/12/28/m ... rest-race/report that the average race fee in 2009 was $ 28 mil with an annual increase of 8.5 % per year. This increase was later reduced to 7% in another publication by Sylt. So in 2012 the average race fee should have been $ 34.3 mil. The METF money that was guaranteed was § 25 m. It represents 8.5% of the $300m estimated economic impact of the race which is exactly the sales tax of Texas.
I have posted all the details at
viewtopic.php?p=191181#p191181 in this thread, so that you can go through all figures and satisfy yourself. You will find two things:
1. Helmund and Ecclestone agreed to lower the initial fee to 25m from 34.3 which was the initial rate that Austin was supposed to pay. This was financed by rising the increase rate from 7% to 10% and it is practically a preferential "friends & family" finance condition that Ecclestone extended personally to Hellmund.
2. The steep rise of of the fee by 10% annually would lead to a wopping $58m race fee in 2022 while the economic impact was still estimated at $300m and the METF money at $25m.
So the hypothetical financial agreement that Pup assumes was never going to work over the long run if we trust the sources close to Ecclestone. The conclusion is:
The Circuit of Americas was always supposed to earn a supplementary profit from other activities to cover the gap between the METF money and the agreed race fee. The confusion is probably caused by the financial arrangement that artificially lowered the initial race fee to the agreed trust money. My figures clearly demonstrate that the contract between Hellmund, Epstein, McComb and others could not work the way that Pup figured.
From these relatively simple calculations I conclude that the Circuit of the Americas investors and particularly Epstein were aware of the need to close the gap from the year 2013 on when the race fee would have risen to $27.5m and the METF money would have remained at $25m.
So now we go back to July 2011 and the decision of the FiA to formally delay the race date by four months. This created the need for the partners to finance the race fee for several months. Bernie was entitled to receive the first race fee in June or July. The METF would automatically defer the payment by the time that the race had been delayed. So a different way of finance had to be found.
We know by now that actually Ecclestone remained patient and provided that finance by not cancelling his contract with Hellmund. One could say that is is only just and fair because the race date was also moved back, but the contract apparently did not provide for that eventuality. So technically Hellmund was in breach of contract from that point in time.
I think that such a view is extremely naive. As shown above everbody must have known that sooner or later a substantial cost burden would be imposed on the circuit investors to share the burden of the race fee with the promoter, Hellmund. If they did not address that point in their partnership contract they must have speculated from day one that they would boot out Hellmund. The postponement of the race only brought this issue on the table one year earlier than it would have done it if the original race date had not been delayed.
So what are our conclusions from there? Unless Hellmund was too dumb to do the math he must have had the backup by the CotA investors for the big future gap between the race fee and the METF money. When Hellmund got into trouble for a four months financing of the first fee they did not help him but apparently used the occasion to renegotiate the contract or boot him out entirely. It is hard to find another explanation.
I find it extremely dumb to gamble the whole GP against the cost of financing $25m for what was effectively one or two months. Compared to the total investment and the inherent project cost risks we are talking pocket money here. It all sounds to me like Epstein wanted to be very clever but he totally misjudged Bernie and as a consequence the investors will loose a lot more than the small finance cost for the initial race fee. Whatever the outcome someone will probably pick up some $ 30-40m damages from this fiasco.
