AUSTIN (KXAN) - The phrase "Start your engines" was heard out at the Formula One racetrack area Thursday -- but it wasn't directed at race cars. The bulldozers were loaded up and off the site after the project hit a wall this week with news of a problem that developed among those spearheading it.
The countdown to a Dec. 7 deadline is under way, however, as the situation can be rescued if developers secure a letter from a bank by then which states F1 boss Bernie Ecclestone will be paid a $25 million sanctioning fee before the first race is held.
That's where the problem lies.
On Dec. 7, the Motor Sports Council meets to ratify the 2012 racing calendar. No money paid, likely no race for Austin, according to Ecclestone .
Last June, Circuit of the Americas and F1 submitted the proper application to the Texas Major Events Trust Fund , along with an economic impact study. That was a year out from when the first race was initially set for, in June 2012. METF rules state an entity can apply for funds no more than one year out from a scheduled event.
When the first race date was later changed to Nov. 18, 2012, it caused a problem. The state process requires another application and economic impact study be submitted to METF, since the June study is no longer any good. The METF could potentially provide up to $25 million to the project.
In the meantime, news is out that New Jersey may also get an F1 race, which concerns the Texas Comptroller's Office -- overseer of the METF -- because of the negative economic impact that might have on an Austin race.
METF takes into consideration money that would be brought into the area via taxes and benefits to hotels, restaurants, car rentals and alcoholic beverage taxes. An event has to bring in at least $15 million to be eligible for such funds.
Circuit of the Americas and F1 officials have to come to an agreement by the Dec. 7 deadline and get a race firmly in place on the 2012 racing calendar in order for another application to be submitted to METF.
At what point do the investment houses that own F1 (bernie is a small %) get rid of this thieving slimey POS. Bribery trial in Germany about the sale from one investment house to another, countless cases of extortion against promoters. How the hell does this guy keep control. I know he had pictures of Max Mosely but who else.
I don't feel bad about Austin. Now, can someone get serious and bring F1 to Road America? Man, that would be sweeeet.
RA is nowhere near safe enough, has has nothing like the facilities needed to accomodate the F1 circus, and a $100+ million resort would be needed on the lake. Remember Bernie (and a number of other F1 bigwigs) stayed in Chicago because all the hotels in Indy were beneath them.
This could easily get moving again if someone involved could just prove they are not a poser 10 fathoms in over their head and show 100mil in the bank or so. For all his faults, Bernie has shown that once the contract ink is dry and the money is paid, he delivers. Believe it or not, the bump in fee price to COTA almost sounds like the original price to his friend(?) Tavo was a sweetheart deal. Imagine that.
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Dale V. Lake Effect Motorsports FM
Bluffing did not work for Tony George and IMS. The difference is TG & IMS had at least two profitable races each year, so they were in a position to do so. With the sanction fees for F1 and the declining attendance (particularly after the tire debacle) they really couldn't afford to keep it.
As another Hoosier native once wrote, "So it goes."
Bluffing did not work for Tony George and IMS. The difference is TG & IMS had at least two profitable races each year, so they were in a position to do so. With the sanction fees for F1 and the declining attendance (particularly after the tire debacle) they really couldn't afford to keep it.
As another Hoosier native once wrote, "So it goes."
Kip
there's a sucker born every minute. Who knows what they're thinking......
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Ted/FM # 13
Shoe String Racing
On a Wing & a Prayer
“We have been ready to send Mr. Ecclestone a sanctioning fee check for some time now,” explains Bobby Epstein, founding partner of Circuit of The Americas. “He hasn’t received it yet because the new contract presented to us two weeks ago contained unrealistic and unfeasible demands.
No, the drama is over for now........maybe more later
Quote:
Originally Posted by Offcamber1
Just a snippet:
“We have been ready to send Mr. Ecclestone a sanctioning fee check for some time now,” explains Bobby Epstein, founding partner of Circuit of The Americas. “He hasn’t received it yet because the new contract presented to us two weeks ago contained unrealistic and unfeasible demands.
My guess is that Bernie raised his fee after the original promoter was out of the picture.
I thought it was common knowledge that Bernie gave nephew Tavo a sweet family deal that was certainly not going to be extended to the culprits who hoodwinked and stole little Tavo's thunder and control.
So the above silly statement from Epstein is simply smoke and mirrors for the most casual clueless observer.
I LOL'd at this statement.
Quote:
“We have signed and returned a contract similar to what we anticipated receiving. This race should be a reality but, if we are going to make the 2012 race date, we must receive a countersignature in the coming few days. We believe the teams, fans, sponsors and local business share our enthusiasm and hope that their voices will be heard.”
Only a dumb 4th grader would release a statement like this. Mr. Epstein needs to google Bernie's history and get a clue who he's dealing with. He's fantasizing about next year when the odds of him getting something for 2013 are now damn thin and getting thinner by the minute. The sooner he caves, the less money he'll lose.
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Ted/FM # 13
Shoe String Racing
On a Wing & a Prayer
I really don't believe Tavo was hoodwinked. He was the first to say that he did not bring any money to the deal - only his personal relationship with Bernie. Instead of trying to be a broker of the deal and retain some sort of commision or equity stake for putting the deal together, he unrealisticly tried to remain as the primary promoter for the events at the circuit. What he was realy trying to to was to leverage his personal connection into the right to be the event promoter - in effect trying to leverage that $10M (or whatever it was) of goodwill into the position of a promoter. This would work if he had other money to put towards promotion but he did not.
Once the initial contract became void Bernie was totally entitled to submit a different contract. This contract may have different terms as the Austin contingent was not negotiating from the same position of strength as they were before the initial announcement. It could be argued that all the publicity since the original announcement has made the race more valuable. It addition since they had already started construction they no longer had the initial leverage in negotiations (although from a sunk cost prospective the work that had been done was irrelevant).
The public counter offer is a valid business arrangement - but only one you want to invoke if you are willing to walk away from the project. My thought is that the investors already have an alternate use for the land but need to show that the race track is not viable to get other land use permits. The original plan for the land was a subdivision and it may revert to that.
This is no different than many other real estate deals which go down in the US every year.
Small fish tries to put something together
Big fish bite.
Plans announced with small fish as spokesperson
Small fish has unrealistic espectations for his role in the organization
Big fish fail to see value
Small fish set adrift.
Tavo was out of his league and unrealistic - he over valued his participation. He is as much to blame as anyone.
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Mark Silverberg - SE Michigan
Lynx B FV & Royale RP3 FF
Zink C4 - For sale / rent
PCR, Coyote, CRG & Birel karts
Last edited by Mark_Silverberg; November 25th, 2011 at 1:57 PM.
Reason: my horrible spelling
What I hear you saying is that Tavo wasn't even smart enough to get hoodwinked. I guess you're giving him even less credit than I did. However you or I slice it, in the beginning he had something extremely valuable and now, in the end he has nothing.
In hindsight, it appears that this deal had less of a chance than Curmudgeon Central guessed it had 18 months ago. Unbelievable.
Tavo.........take your place next to Peter Windsor.
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Ted/FM # 13
Shoe String Racing
On a Wing & a Prayer
I think it was more along the lines of he overestimate the value of his personal relationships. If he would have agreed to take more if his pay on the back end which is more appropriate for someone contributing intellectual property and not funding, he probably would still be part of the process.
If he would have negotiated a reasonable salary & expense package plus bonused based on attendance and profits over the ten year run of the contract then he would probably still be in place.
Personal relationships only get you so far in business in the US.
Bernie may be a greedy dwarf but as long as countries are willing to pay the price is he really any different than any other business person with a product to sell? He has a responsibility to make the best financial deal for his product and also not have it devalued by circuits or promoters who do not produce.
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Mark Silverberg - SE Michigan
Lynx B FV & Royale RP3 FF
Zink C4 - For sale / rent
PCR, Coyote, CRG & Birel karts
If you saw the Brazilian Grand Prix yesterday, Ecclestone was interviewed on the grid about the race and asked something to the effect about what the Austin group was missing to get the race. He said " a pen and money" Don't like Bernie at all but thought that was funny as crap.
That they would re-write the contract and send it back hoping Bernie would sign it shows that they have no clue who they're dealing with.
So the proprietors of the local business are going to sue?! We've already hashed out why their case is groundless. This is starting to sound like a throwaway Mel Brooks script....
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Dale V. Lake Effect Motorsports FM
Last edited by dalz; November 30th, 2011 at 8:22 PM.
other countries or F-1 race organizations have been with Bernie but the U.S. is looking pretty silly after this circus followed Peter Windsor's fiasco.
Oh well, for those involved in the real world, this is nothing but a passing chuckle.
Well, I'm still hoping some realistically serious promoter will come in to buy the land, kneel down and beg Bernie for another chance. With the way the economy' continues to wallow, that may be several...........er,............many years down the road.
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Ted/FM # 13
Shoe String Racing
On a Wing & a Prayer
The ever-flexible Mr. Ecclestone has given the Austin organizers a one week extension to knuckle under. The last quote from him is:
"They would like the race to take place. I'd rather see the race happen than not."
Not exactly overwhelming support!
Well what Bernie does not understand is that the US really does not need F1. F1 has been out of the US market for too long and does not have enough of a presence and fan base to make an F1 event economically viable at the fees Bernie wants to charge. The US has many other alternative forms of racing. Bernie gets away with his fees with other countries because they have no big $ alternative. And other countries like India, China etc. are looking for world wide publicity to show they are up and coming countries, and thus are willing to pay crazy fees and lose tons of $ on F1 events. F1/Bernie really does not think they need the US, but Mercedes and many sponsors would disagree. BMW/Honda/Toyota really wanted a US GP but they are gone now. If F1 wants in the US they need to charge fees in line with what will allow a profit to the event, then build a presence, fan base to increase attendance and ultimately if it all goes to plan and you have a good nationwide marketing machine to pump F1 up and you get a well known US driver, only then would they be able to charge the crazy fees. Otherwise I just don't see F1 being profitable for a promoter/track.
I don't see Austin happening, and don't think the Austin people should fold, just build condos and use the land for a productive purpose. If NJ happens it will only last the first contract term and will not likely be renewed unless Bernie begins to understand he has no leverage in the US.
It's out of control just like many other things,politics,media,cost of racing,cost of street cars not to mention the cost of diesel and gas for fueling them.Why does a Camaro cost 35K when they used to cost 3500.Has everyone's income grown by 1000 percent? If Bernie Eccelstone can get 25 million per sanction fee for F1 more power to him but if it were me I just happy to watch it on Speed channel.If it happens I will probably spend the ridiculous ticket price and go and hope there would be some overtaking, and it would help the local economy.
It's out of control just like many other things,politics,media,cost of racing,cost of street cars not to mention the cost of diesel and gas for fueling them.Why does a Camaro cost 35K when they used to cost 3500.Has everyone's income grown by 1000 percent? If Bernie Eccelstone can get 25 million per sanction fee for F1 more power to him but if it were me I just happy to watch it on Speed channel.If it happens I will probably spend the ridiculous ticket price and go and hope there would be some overtaking, and it would help the local economy.
In 1970, US per capita GDP was $4893 (in 1970 dollars); in 2009, it was $44872 (in 2009 dollars) - roughly a factor of 9 greater.
In 1970, a base Camaro was $2749 (again, 1970 dollars); in 2009, it was $ 22245 (again, 2009 dollars) - roughly a factor of 8.
Camaro prices have gone up less than income.
And this ignores the greatly increased quality/reliability of Camaros. (I owned a 1970.)
There are lots of ways to slice and dice the numbers. The bottom line is that you can deceive yourself by looking simply at the current dollar price of something (compared to the current dollar price at another time).
Consider this: when I started work in the early 70's, my lifetime ambition was to earn $18000 per year, which would buy a nice house and raise a family (with stay-at-home mom) at the time.
A better question to ask is: How many hours would I have to work in order to buy this thing?
Enough digression. We return you to our regularly scheduled program: Bernie Burns a Greenhorn, or All Hat and No Cattle.
If one wants to feel good about costs, one has to look at items which have benefited from technology. I bought a professional level Canon F1 SLR in 1974 for about $400. One now can get a semi-pro level digital SLR for about $1200 with amazing capabilities. Not as rugged, though. This is particularly true for camera bodies. The good lenses have increased in price much more than the camera bodies.
- Frank Chambers
Apparently that elusive pen and money has been found. That's all it takes. Congratulations.
"appears to have been reached". With no statement from Bernie or any FIA official. More smoking mirrors. I won't believe this event until I see it on Speed on practice day.
"With no statement from Bernie or any FIA official. More smoking mirrors. I won't believe this event until I see it on Speed on practice day.
The Austin date was included in the official FIA F1 calendar released today. You don't need a more official statement than that. However, I do agree that nothing is guaranteed until there are cars actually running on the track surface next year.
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Matt King
FV19 Citation XTC-41
CenDiv-Milwaukee
KEEP THE KINK!
It's a single one sided statement in a local newspaper. The news really is only, "Bernie gets some money." <yawn> What else is new.
Schedule announcement? Bernie can move the schedule around like pieces on a chess board. As we know, he is constantly working on deals and can bring back old races at established tracks in short order, so he always has many balls in the air.
Does anyone think that all the contractual details are worked out and all they have to do is build the track? Lots of work to do. And it's gonna be done by guys in suits, not hard hats.
Stop me if you've heard this before but as Tom Waits put it so succinctly, "The big print giveth.........and the small print taketh away."
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Ted/FM # 13
Shoe String Racing
On a Wing & a Prayer
i received an email form the organizers this morning saying the same thing, we'll see. the devil's (Bernie) in the details. i'd trust madoff, before bernie, with my money.
......and John, stop confusing the financial issues with facts. the next thing you know we'll be convincing people about the superior throttle response of the injected honda with that friggin POS restrictor.
i received an email form the organizers this morning saying the same thing, we'll see. the devil's (Bernie) in the details. i'd trust Madoff, before Bernie, with my money.
I don't think that's an accurate assessment. Bernie doesn't screw race organizers. You sign and the money makes it to his account, and the F1 show goes on. He just charges an obscene price, and there are some worldwide race honchos, governments, and other entities who are willing to pay. I'd bet he extracts $100 million from Abu Dhabi every year, because they'll pay it.
I would think McCombs was the main player in the last hour, guaranteeing the long-term funding.
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Dale V. Lake Effect Motorsports FM
i received an email form the organizers this morning saying the same thing, we'll see. the devil's (Bernie) in the details. i'd trust madoff, before bernie, with my money.
Or Jon Corzine. I remain a steadfast sceptic. YMMV.
Meh
The sooner he caves, the less money he'll lose.
