AUSTIN, Texas (AP) — The future of the struggling U.S. Grand Prix was thrown into further doubt Wednesday when the 2016 Formula One calendar listed the race as “subject to agreement” with the promotor.
Officials at the Circuit of the Americas have said they are financially strapped after storms wiped out much of the 2015 race weekend and by news the Texas governor’s office is cutting public funding by about 20 percent.
The 2016 race calendar still has the race scheduled for Oct. 23 but with an asterisk. Track officials did not immediately respond to a request for comment.
The $300 million track was built to host the race, which has run in Austin since 2012. Mercedes driver Lewis Hamilton has won three times, including this year to clinch this third Formula One championship.
The private investors who built the track, including hedge fund manager Bobby Epstein and billionaire businessman Red McCombs, said they were promised significant help from the state to pay for the commercial rights to hold the race over a 10-year deal. Under an agreement reached with former Gov. Rick Perry and former Comptroller Susan Combs, Texas gave $25 million from the state’s Major Events Trust fund in the first year.
Promoters said they were counting on that money every year. But a 2010 letter from Perry and Combs to Formula One’s commercial rights holder Bernie Ecclestone notes the state portion could be less than $25 million for the rest of the contract. The letter says that if tax revenues fall short, promoters must make up the difference.
Texas Gov. Greg Abbott’s office told track officials they will get about $19.5 million from the state for the next race because the formula used to award grants were changed to make them more restrictive.
Combined with local tax revenue, race officials will still get about $23 million in public funds.
Abbott’s office did not immediately respond to requests for comment on the updated race calendar. Abbott was traveling in Cuba on Wednesday, wrapping up a three-day trade mission to the island nation.
Austin Mayor Steve Adler has called the race an important event for the Texas capital. But he also has told track officials they can’t look to the city for a “bailout.”
Track officials have said the event has pumped “hundreds of millions” of dollars into the Austin and Texas economies since 2012 and applied for state funding under the same formula as Super Bowls, NCAA basketball tournaments and other events.
from Business Insider http://ift.tt/1PwMe3V