COTA in Trouble?

Peanuts was in reference to what COTA does. I wouldn't call anything at Silverstone peanuts for instance.

OTOH Hockenheim and Nuerburg do a lot of other stuff and barely survive

 

Exactly. How many times are people going to get in a tizzy over rehashes of the same stuff they've been talking about since 2011?

* Yes, everything about the taxpayer money from the state is shady. From the application, to the attendance counting, to the economic impact reports. Take your pick.

* No, it's not going away. In fact, COTA will get even more taxpayer money each year, as has been the case since they opened.

* Articles like this help COTA make their "we're worth basically nothing" claims during property tax time (bills due Jan 31). The "we're bringing so much to the local economy!" articles come out when the checks are supposed to be cut, right now the biggest ones are after F1 (Nov) and X-Games (May/June), so that is when you'll see those.

 

+1
if the public could pay a flat fee to enjoy the track on their cars like "the ring" in Germany, a nice revenue stream would help things. 100 cars x 45 weekends x 2 days x $300 each = $2.7 Millions

 

It wouldn't be all profit though...

You would need personel to service the track, rescue teams, medical coverage, etc... everything track days have to provide.

Also, once people would have "sampled" the track, would they come back?
The Nurburgring is a different prospect than any other track; there is nothing like it.

 

Just today I was doing a little bit of research into what it takes to do the ring: Sadly they have now so many rules in place, it is hardly worth it anymore.

It's still on my bucket list, but I'm not sure it'll be all that much fun checking all the necessary boxes to just do a friggin lap.

 

The cost to run a temporary street race is enormous ... historically, modern street races (at least, those required to pay large sanctioning fees) fail without substantial government support. That's the bottom-line reason why New Jersey never got off the ground ... without government/taxpayer support, the business model simply can't attract investors.

The inescapable fact is this : no F1 racing facility makes money during the actual F1 weekend (due in large part to the sanctioning fees). That statement alone will sink a modern temporary street race (that must pay sanctioning fees) ... without break-even support from local government.

A purpose-built facility is a much better proposition, financially (for investors and lenders) ... IF IF IF the facility gets substantial utilization throughout the year.

 

I am a little surprised they have not been able to add more professional racing events to their schedule. I would have though the Indy cars would have wanted to race there, world superbike, and even nascar, though they may be worried that more events would distract people from F1.

 

a more detailed analysis, temporary street race versus purpose-built facility :

IF we only look at a single year, AND we assume that the purpose-built facility would only be used for a single weekend (F1) during that year ... THEN the street-race would be more financially attractive, of course.

But the business model is a bit more complex ... let's look over a 10-year period (not atypical, for investment analysis):

COSTS:

- Initial build cost : purpose built facility is substantially higher, of course. But street race is not zero ... publicly available data suggests that NJ would have cost close to $100 million (compared to COTA $500 million).

- Yearly operating cost : temporary street race is substantially higher. So much so, that over a 10-year period, total cost for street race is comparable to ... and may very well exceed ... the purpose-built facility, including initial build cost.

- Sanctioning fees to Bernie : a "wash", these would be similar for both types of facilities

A good article, for cost reference :

The cost of hosting a Formula 1 Grand Prix - British Airways Business Life. Business advice and inspiration, insider tips from the world?s top CEOs, analysts and entrepreneurs.

REVENUE:

- Purpose-built facility wins, hands down, IF it makes good utilization throughout the year.

- Government funds will certainly help both business models

BOTTOM LINE :

Over a 10-year period, a purpose-built facility is MUCH better investment ... costs (including initial build) over 10 years are comparable to, if not lower, than a temporary street race; and yearly revenue potential is MUCH higher. Of course, this does not mean or imply that a purpose-built facility is a "sure thing" ... the business (like any) can be mismanaged, F1 attendance may be lower than expected, year-round utilization can be lower than expected, etc.

 

I don't think F1 wants IndyCar there....it might even be part of their contract (no competing open wheel series, etc)

WSBK took over MotoGP's spot at Laguna Seca, and MotoGP has two other rounds in the US (COTA and Indy); I don't think COTA can support two international bike series, unless it was a joint event; and I don't think the US can support more than 3 major bike races.

NASCAR won't go there because a) they don't own the track , b) they have Texas Motor Speedway not too far away in Ft Worth hosting 2 races a year, and c) they don't like road racing...they only go to Sonoma and Watkins Glen because of proximity (relatively) to SF and NYC.

COTA screwed the pooch with SuperV8s, are trying to develop PWC as a standalone event (I hope that works, love that series), and are trying to find the right format for the IMSA/WEC doubleheader weekend. IMO this could be a huge event if done right, which so far it hasn't.

 

2015 only has 4 events scheduled at CoTA; Pirelli World Challenge, Mtot GP , X Games and F1. That may not be enough to break even. Especially since F1 will be a loser financially.

 

Also the Tudor/WEC combined weekend in September. The # of major events in 2015 are the same as they have always been, but with V8 Supercars replaced by X-Games. And X-Games makes a lot more money.

 

Looks like I'll be going down to the Mexican GP this year instead of Austin. Flights out of LAX are about the same for both, even cheaper if I fly out of Tijuana. I have family in DF and hotels will be cheaper than Austin too.

 

it's not their first ever stand alone event, and yes. there are more manufacturers (and potentially more competitors) active in PWC than IMSA right now.

 

I have been approached for a bunch of track days and weekends there in the last 2 years. The cheapest I have seen was around $1,500 for a one day event. From what I remember reading, the minimum track rental is around $50k, so takes a good sized group to make that possible.

I bet it is getting used by these type events a lot more than anyone here knows.

I know they had the College Solar car race there last year.

Some Dallas f/chatters ran the track a few weeks ago on foot as part of a 10k run.

I don't think the F1 race is going to another venue anytime soon. Look at some of the quotes from the drivers, and they love the track, and coming to Austin. It is an amazing facility and track, and I am glad it got built with all the turmoil surrounding it.

I do think management has had a lot of hiccups, and that needs to be solved.

 

V8SC doesn't have a built-in domestic audience like the X-Games. It doesn't have the TV exposure or American competitors. Maybe it could have made money eventually but it would have required a long and expensive commitment for everyone involved -- that's why they ended up dropping their other international race attempts as well (China, Bahrain, UAE).

As for the first PWC stand-alone, I'd say it's about the same as the SCCA event that got dropped.

Point being that the number and size of the events now are about the same as before. Not significantly more, or significantly less.

 

Running a racetrack is rarely a wise investment. These days, when you want to run an F1 track Tilke has to come round and deliver it with spaceship surroundings so it looks cool. Tilke comes with a very hefty price tag.

Look at Ascari Resort...50M to build including all outbuildings etc and it's a wonderful facility. It lacks grandstands (because it wasn't needed), and if it was still allowed, it needed just bigger gravel traps (instead of a parking lot, which will ruin everything) and it would be good to go.

Had tilke designed it it would've been twice as wide, parking lots everywhere, big ass buildings and cost 10x as much.

I think over the years Ascari is a better idea then COTA, and MUCH more profitable. As a private individual I know what I'd invest in. I wouldn't run an actual F1 race on my track. Chance of making your money back is slim to none. Going the Ascari route you stand a much better chance at not only making a buck, but have a good time doing so...

 

I imagine both V8SC and CoTA had completely unrealistic expectations, and fault lies with both. I mean, the series couldn't even be found on US TV most of the time... they wouldn't put the Chevy badge on their GM cars, and the door-to-door racing excitement they promised paled in comparison with the support races.

I think the failure of the other V8SC international races points to other problems besides just COTA's promotion (or lack thereof).

So X-Games replaced V8 Supercars, and PWC has replaced SCCA (whether you consider that major or not). The point is, the number of events is about the same, despite the churn.

 

... anytime you hear the phrase "...economic impact," think "...expropriation of revenue from state coffers and local municipalities." As opposed to performing proper due diligence, ferreting out good investment, image a policy community of scoundrels positioning themselves to (1) capitalize off the multiplier effect of bad investment, and (2) misuse public sector resources to wine and dine themselves, financing entertainment.

Tax is a sacred trust. You would never want F1 coming, to your home town -- asj.

 

I am sure they will do just like NJ Motorspsorts Park did and eventually file bankruptcy protection and renegotiate all their debts to the many creditors, both small and large, and reemerge a leaner facility

 

... COTA up to its eyebrows, wallowing in a sea of red ink, laughing stock of the United States, the Austin policy community just fell, hook-line-and-sinker, for the oldest trick in the book.

What's happened in Elroy, Texas, is commonly referred to in legal nomenclature as, "the Pigeon drop," a confidence trick whereby the "pigeon" is duped into a transaction, paying an up-front sum which secures rights to perception of a larger sum of money, which never materializes (in reality, scammers abscond with the money, leaving the pigeon bankrupt).

Grinning ear-to-ear, laughing it up all the way to the bank, Bernie Ecclestone walked away, scoff-free, suitcases stuffed full, tens of millions in Texas taxpayers' hard earned revenue which could have otherwise been allocated toward real investment, to spawn real growth (e.g. education; infrastructure modernization; next-generation high efficiency traffic systems). The most expensive home in America, Ecclestone merely reallocated Texas taxpayer revenue, scooping up the Aaron Spelling mansion in Beverly Hills, for his daughter, Petra (e.g. the Grand Prix of Texas indirectly subsidizes Petra's annual property tax bill, on the Aaron Spelling Mansion; technically, the people of Texas indirectly pick up Petra's tab, allowing her to live, rent free and tax free, in the most expensive home in America).

Succor born every minute, we hope the good people of Texas are enjoying their Formula 1 -- asj.

 

Driver Edge event is $950 for the weekend (includes instructor and T-shirt) while Edge Addicts is $495 for the day... considering the quality of the track, quite reasonable. If you go through FNA..add a 1 or 2 in front of those amounts (..lunch is included thought)