US Grand Prix “Will Happen” This Year Says Ecclestone

Ecclestone knows the money is coming or there will be no race

Formula One’s chief executive Bernie Ecclestone says that the United States Grand Prix in Texas will take place in October despite the race facing a $5.5 million cut in state funding according to Christian Sylt of Forbes.

The future of the race, which is held at the Circuit of the Americas (COTA) track in Austin, the capital of Texas, has been in doubt since November when it came to light that its funding would be cut.

The track’s parent company is controlled by its chairman Bobby Epstein and auto magnate Red McCombs. It has received $25 million of public money annually since the US GP premiered in 2012 but last year the state of Texas used a new method to calculate the economic impact of the race. As the end result was lower than before the state funding reversed and the race was put in jeopardy.

The US Grand Prix was widely considered to be the most thrilling race of 2015 and crowned Britain’s Lewis Hamilton as the F1 champion. It was seen by a crowd of 101,667 despite the race weekend being plagued by torrential rain.

In November Mr Epstein shed light on the impact of the funding cut when he said “I think we’re screwed…The state clearly made promises. I think we made a deal, and we lived up to our end of the deal." He added that the “big question" is “is the race coming back?"

Later in the month Mr Ecclestone revealed to local Austin newspaper the American-Statesman that he has given COTA more time to pay its annual F1 race hosting fee to cope with the decrease in state support. “They get money from the state, and the money from the state is late, so that’s why they are late," said Mr Ecclestone.

The uncertainty over whether COTA can afford to stage the US Grand Prix led to the race being listed on the 2016 F1 calendar in December as being ‘subject to confirmation’. Since then it is understood that Mr Epstein has been attempting to put measures in place to ensure that the race gets the green light. Mr Ecclestone says he is sure it will.

“I think Austin will happen this year. Epstein is confident. He knows the money is coming," Mr Ecclestone told Forbes.

State funding is crucial to F1 race organisers as they generally do not get any revenue from the corporate hospitality and advertising banners at the track. This is paid to F1 Group subsidiary Beta Holdings with the revenue from television broadcasts paid to F1’s operating company Formula One World Championship (FOWC). The race organisers’ sole source of income from F1 is usually ticket sales and this only tends to pay for the running costs with the annual hosting fee then covered by investment from governments. Making matters harder, an escalation clause in the race contracts boosts hosing fees by up to 10% annually.

COTA was believed to be one of the most secure races on the F1 calendar as the state of Texas had committed to paying the $25 million hosting fee directly to FOWC as Forbes revealed in December. This commitment was made in 2010 when the state’s former Comptroller Susan Combs wrote to Mr Ecclestone to say that in “2013 through 2021, we will be sending $25 million dollars to FOWC by the end of July 31st of each year preceding the actual race event."

However, since then, control of the budget has shifted to the office of Texas’ new governor Greg Abbott who took over in January last year. Even though the letter to Mr Ecclestone did not include any caveat that the terms were subject to change in future, Mr Abbott overturned it and the future of the US GP was put in jeopardy. This year’s race will be its fifth anniversary so stands to be the biggest yet. It is on track to go ahead but only time will tell whether the state support will accelerate. Christian Sylt/Forbes