No kidding. Not very fair to change it after the fact when it changes the apparent context of the whole discussion. Should be changed back, or made intellectually honest as you state.
Surprised this hasn't been posted yet. http://www.planetf1.com/news/3213/7312334/Bernie-100-Sure-US-GP-Will-Be-Axed Well, according to Bernie himself, the Austin 2012 GP is officially dead.
Interesting perspective and speculation. Read to the end... interesting coincidence with Donnington Park. Was Tavo doing Bernie a favor all along? http://www.theglobeandmail.com/globe-drive/formula-one-race-in-texas-on-death-row/article2240008/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Home&utm_content=2240008
That's rather mind bending to think of all the design money spent with Tilke and HKS if the whole thing was a sham. As well as (by my off the cuff estimate) about 1/3 to 1/2 of the track $$$ itself. It costs a lot to CANCEL contracts too...usually the Force Majuere clause is strictly related to weather events, not financial ones
Tex, think a little. COTA spent the money. Not Bernie. Not Tavo. A scam implies Bernie / Tavo had no intent on following through. That's not the case. Bernie gave tavo the ball and said have fun. if he pulled it off, there be a race in austin. Bernie knew the odds. Then he used the texas threat to leverage NJ / other sites. As always, Bernie wins regardless. As for you 1/3 to 1/2 off the cuff estimate,... plowing dirt is 1/3 to 1/2 the cost of the track?
+1 I don't think he planned it that way, it just kinda fell into his lap - As we've said many times, Bernie plays "hard ball" (as the Yanks say ) better than anyone...... Having said that, doesn't (didn't?) Red own a sports franchise or two here? - As much as I "despised" Crazy Al Davis towards the end, he and his ilk may be the only guys who could negotiate with him..... Who is this Epstein dude? Cheers, Ian
I actually theorized this when it was first announced (hey look at me everyone!) although I was talking about Indy. I said all along that Bernie was happy to give the "golden ticket" to Tavo, and if he parlayed it into a race, Bernie would be happy... if he didn't, it would be no skin off Bernie's back. But it also wouldn't stop Bernie from negotiating with others. The article may be true - that Bernie wasn't just rolling the dice on Texas, but thought they would never be able to come through with everything needed for an event, but was happy to use them as a bargaining chip against NYC, and to keep FOTA off his back about a US GP.
The Globe and Mail claims, per Combs' recent comments, that: Texas feels the second race — apparently something that never came up while Ecclestone was negotiating his deal with Austin — might significantly lower tax the revenues needed to recoup the public money poured in. “The recent announcement of an annual F1 race in New Jersey is a concern, as additional races have the potential to reduce the number of attendees to a Texas race, thereby decreasing the economic impact,” Texas comptroller Susan Combs said in a statement. But, a year ago, Combs was well aware of the possibility of a second US race. Austin Statesman, July 19, 2010: Combs said she would be "very surprised" if F1 put another race in the U.S. and said even if that happened, it would not affect the Texas race. "This site is the U.S. Grand Prix, and it's in Austin, Texas," Combs said. She added that people at Silverstone "were wildly enthusiastic about there being a U.S. Grand Prix."
Bless her!..... Want to swim with the big boys? Better learn how to play their game then darling........ Never, ever try and out-smart the pygmy. Cheers, Ian
http://www.kxan.com/dpp/news/local/bulldozers-leaving-f1-work-site Even Tavo admits they don't have the money...
"Want to swim with the big boys? Better learn how to play their game then darling........" Exactly what I've thought since I saw the photos of Combs trotting around Silverstone like Bernie's happy pet ostrich. Long ago I had to google Red McCombs to figure out why he's supposed to be so smart - he sure seems to be. What he's doing in this company, I don't know. Photo from the Statesman, in happier days. http://www.statesman.com/sports/formula1/combs-enthusiastic-about-f1-after-watching-british-grand-812021.html Image Unavailable, Please Login
Don't you speak Politician? How much do you want to bet Combs had skin in this game. Not her own money, but at the very least I bet she was comped 1st class travel to London to meet with Tavo and Dwarf on this. And I bet she had a lifetime box-seats pass to the Texas race as well, maybe even some jobs for her spawn or a future job with COTA as International Sporting Manager with lots of paid first-class International travel. It's not that she knew or didn't know about these things before... the important point is that previously, she was in bed with COTA/Bernie, now she is quickly re-aligning herself with the taxpayers. She's jumping off the wagon now and taking a sprained ankle, rather than riding it into the wall and suffering a fatal blow. She's not going to hang her job on the USGP project.
Would it be in bad taste to start a crow thread with various comments from various people highlighted for posterity?
The money from Texas is not a guarantee on the contract. Quite the opposite, the event has to generate enough taxes to keep qualifying for it annually. The same questions you bring up here about Texas are even more applicable to New Jersey. No entity is going to put up a LOC for several 100MM for guaranteeing an event that is run on a temporary street circuit. Possible that someone would be willing to finance the race, and take the loss every year.... Bernie has bosses too.......i doubt there is a line forming for people willing to invest money in a circuit for USA, if he screws the pooch on this one, i bet the board is going to be asking a few questions.... And his opinion is unbiased? They have money. Bernie said the contract with Tavo was in default in June. Why would they continue after that if they didn't have any money?
We'll hold off for now I am actually very curious to see what happens next. Epstein has tens of millions tied up in construction costs. I bet he owes money (contractually) to Austin Commercial amongst others. McCombs owns the land, but it has Epstein's improvements on it. The Texas money appears to be gone - at least imminently, and maybe for good. There is no way this whole thing is going to have an orderly shut-down at this point. Either someone finds the money to pay Bernie's fee, or the whole thing implodes and a passel of lawyers enters the picture to root around the corpses of COTA (and FTP?) to see what edible giblets are left.
Bernie has issued a contract to NJ for the race - they still have to come up with his fee. The difference is they are starting $400MM ahead on the deal. COTA negotiated Bernie's fee being paid by the state. It doesn't matter the specific mechanism by which that was going to happen - all that matters is that it was going to be paid up front, months in advance. Now, it is not going to be paid until after. That is not acceptable to Bernie. And rightly so. Why should he deliver his product and then wait to get paid until after the fact? You can't be serious... do you think Bernie needs Austin? For what? He has FOTA saying they want a race in the USA... well, he laid out his terms and COTA failed to meet them. This is like me telling an employee they need to do X, or they get fired. They don't do X, and I fire them. Then someone says "well, you didn't do enough to help". I don't need to help - I have way more prospective employees than jobs to fill. Bernie has way more people wanting to give him their money than he has race slots to offer. Bernie needs Austin like a donkey needs a 9-Iron. So if they have money, why don't they send Bernie his payment and have the race? Why did they miss numerous deadlines that kept getting extended without resolution? I said earlier they were doing this thing on a shoestring. I think it's pretty clear I was right. They were putting the deal together as they went along. That's why there were so many delays and false starts. It's not my first rodeo and I recognized the trend. Bernie saw it coming probably before the ink was dry on Tavo's handwriting. It's always about money. As in, COTA has none.
Here's a link for the press conference with Tavo Hellmund from today. http://www.theaustingrandprix.com/news/2011/11/17/tavo-hellmund-speaks-about-future-of-f1-in-austin.html http://vimeo.com/32295740 /// Overview of Press Conference Just a few hours ago, Tavo Hellmund called a press conference to address the growing concern about the future of the Formula 1 United States Grand Prix to take place at Circuit of The Americas in Austin, Texas next November. In this conference, he explained the complicated situation that has lead to increased scrutiny by Formula 1 head Bernie Ecclestone and spoke more about his own relationship with Circuit of The Americas. In a tiny room packed to capacity in downtown Austin, Tavo and his attorney, Casey Dobson, began by calming the waters which have lead to a full scale media assault on the future of Formula 1 in Austin. Tavo was confident in his belief that this will be sorted out, but conveyed a sense of frustration with his partners in order to get FOM (Formula One Managment) their sanctioning fee for the upcoming race. Unlike the speculation by many media outlets that Tavo has been solely to blame and responsible for the events leading up to this situation, Tavo enlightened us on the past several months leading up to this day. Most notably that the race was always supposed to be post-Montreal (in June), and due to concerns about circuit completion schedule, Bernie was helpful in accomodating the move to November on the calendar. However, this schedule change did not effect the initial $25million payment to Bernie which was still due in late July, and though Bernie was very patient, the investors have been unable to provide these funds even several months afterward. Thus, the contract Tavo had with Bernie is now considered breached and Bernie has still not been paid. At this point in the press conference, Tavo expressed several times that the money just isn't there, and the Circuit of The Americas has put him in a difficult situation. He conveyed several times that he is not a money man, and though his expertise in motorsports and promotions are very, very valuable to the success of Formula 1 in the US, he has been sidelined by his own partners due to a "difference in vision for the project." Tavo did not elaborate on what this difference is, or what portion of the project has caused this conflict, but it's clear that Tavo is confident he has gone above and beyond his duties to his partners and is the primary man pushing for this work work out. Many of the other reporters asked Tavo questions about his status with the team and whether he had been 'pushed out' of the project. Tavo did respond with a simple statement that he had been offered a buyout but he did not disclose any details. /// Conjecture Today Tavo spoke more about the internal conflicts involving a "difference in vision for the project" which fall in line with Bernie's claims a few weeks ago. Whether the nature of these conflicts have made solidifying the funding for the project difficult has not yet been proven but it's likely that the other partners are looking to solidify their race contracts before investing any more money into the project. What remains to be seen is if COTA is willing and ready to work with Tavo to make it happen, assuming of course that they aren't trying to get their own race contract on their own. All statements from COTA the past week have indicated they are ready to do so. Of course all anyone really cares about is if this race is going to happen, and at this point there are still some things that we need to see before we know for sure. The first would be the funding for the race contract to be secured and sent to Bernie ASAP, this would solidify the race on the calendar and cast the doubt aside. The second is for the Circuit and Tavo to iron out the details of their relationship to ensure a positive outcome for all parties. As Tavo said in the conference, no one has put more blood, sweat and tears into this project than him, and his background combined with his connections within the industry make him THE person to ensure the Grand Prix is a success. When I first met Tavo in July 2010, following inital F1USGP Press Conference, I immediately felt confident that he was the man with the vision and determination to see this project through and it would be a severe tragedy to see Tavo left behind on this project for problems that can be worked out. Given the gravity of today's press conference, we expect more developments from all parties involved and will continue to bring them to you for the latest updates.
I was serious. Might not have explained myself. I was going on the assumption that if you're right, and he wants an LOC for the full value of the contract; That would sour any likely investors to the idea of making a race in America [ever]. Sure Jersey would be $400MM ahead, but they have 0 equity, and having to commit that kind of capital to a rather shaky proposition, with no underlying assets at all. Bernie does need Austin because Indy doesn't want him.... I just don't buy the "bernie doing it for the teams" explanation about the sudden fixation with America. CVC (or whoever owns F1) wants their product in America, and having two races would be nice. So yes, I could see it coming into question if Bernie was negoiating in good faith here. The closest Bernie is ever going to get to a government sponsored GP in USA, is with COTA, and the Texas METF......
The BBC report puts blame (or allows the Texas State government the excuse) to pull the plug. I said as soon as the NJ event was announced it would be a problem for Austin. I don't know who the state comptroller for Texas is but... she's RIGHT. http://news.bbc.co.uk/sport2/hi/formula_one/15766613.stm "In her statement, the Texas state comptroller explained that the announcement of a second US race, scheduled to be held in New Jersey for the first time in 2013, made it less appealing to the state to fund the Austin event through its Major Events Fund. That was because it was likely to have an effect on the number of visitors to the Austin race, and therefore reduce the economic benefits for the state."
Well this sucks. I was hoping they could make it happen in Austin. I do see NYC being a more desirable destination for travelers though. I think it's stupid that they're calling it a New Jersey location rather than NYC.. even though technically its on the other side of the river. But it's still the New York Giants and Jets when they're in the Meadowlands. Question now is what happens to all the money spent so far on pushing dirt around in Austin?
The teams want a race in the USA - they are the driving force and have been all along. All the value they derive from F1 involvement applies moreso in the USA than anywhere else, at least when you are talking about new markets (for F1). CVC would like to expand into new markets too I am sure, but they have tried many times in the USA and it has just not caught on - we have too much other sport here. I doubt CVC cares much if the new markets are places like India, Russia, China instead of the USA. They are a for-profit company, so if China will pay $40MM, that's a lot better than $25MM from the USA. CVC makes money on race fees and the TV rights. They want asses in seats and eyeballs on TV's. Whether said asses and eyeballs are in the USA or Abu Dhabi means little to them in comparison to what it means to the teams. As for the sanctioning fee - we have to disassociate the LOC term from the dollar value. The bank is the intermediary there and they will set the conditions under which they will write the LOC. I am just saying I would think Bernie would want the LOC to cover the contract term, because that's what he is being asked to do on his end with a 10-year contract. How confident should Bernie be that COTA would be able to continue operations for 10 years? There are LOTS of other tracks that didn't even make it 5 years... and COTA would be more leveraged than most, so they are high-risk, IMO. As for Bernie needing Austin - you can't be serious. Do you think this is a bluff and Bernie is going to capitulate? He holds all the cards. He has a race in Jersey already, he already got out of his Austin contract. He doesn't need Austin one bit. But without Bernie, Austin is entirely dead. What are Epstein and McCombs going to do with the land and a 10% completed racetrack construction project otherwise? If you look at their balance sheet under the assumption the other race series' will bring in the bacon, they still have all the costs of making the track ($400MM), but have lost ~$750MM on the income side (race income + Texas money). Granted, the TX money doesn't go to COTA, but they have to pay it if Texas doesn't, so it's a new liability for them. What is Bernie's potential exposure? Well, he has the NJ race, so he's all set for bringing F1 to the USA. I don't see much downside for FOM and Bernie at all. He doesn't need to care about COTA. But on the flip side he is crucial to their ability to operate as a going concern.
I am sure a big part of why Jersey stepped up to the plate is that the whole state pepetually lives in the shadow of NYC. Everyone knows it's the NYC GP.... but you better believe Jersey will flog the NJ horse for all it's worth, and then some
