How Long for Formula 1 in Austin?

We've read a few reports suggesting that the ten year contract for Formula 1 in Austin may not have been drafted as originally anticipated.  With recent quotes from Bernie Ecclestone playing to the rumor bandwagon, speculation on the future and stability of the race contract have been brewing around the world.

Just to give background, the finalized F1 contract between Circuit of the Americas and Mr. Ecclestone was rumored to be executed a day before the World Motor Sport Council met last Wednesday.  Following a deadline extension by Bernie himself, the deal was reached in private with little details about the terms negotiated between the two parties - but rightfully so, as this is a private business venture, after all.

In the days following this release, Jeff Hahn (speaking for COTA) spoke with local news channel YNN, and said the details about the new contract with F1 were confidential but there is "an agreement, and the agreement calls for a ten year run of Formula 1 here at the United States Grand Prix."  This was very welcome news to local and worldwide fans, all excited to see the return of F1 to America in 2012.

Recent details from Mr. E, however, have suggested that the financial aspect of the contract with COTA does not include a ten year commitment.  Pit Pass reports Bernie said:

They gave us the money for next year and guarantees for the future but not for the whole ten years. 

Pit Pass also asked if he's confident the 2012 race will happen...

They've paid us the money.  I'm confident we'll keep the money if the race doesn't happen.  It's an incentive isn't it?

 Pit Pass let Bernie continue with some positive remarks...

I don't think they would have paid the money and given us the guarantees we wanted if they weren't sure the race would happen.

From these quotes it sounds like the ten year term may not be guaranteed in the signed contract, but there's a missing link in this Bernie-Quote-A-Long.  Given that Bernie is speaking almost exclusively about money in his three quotes in the Pit Pass article, we believe his first quote is in regards to the financial, and not time, aspect of the contract, which probably does not equal up to ten years of monetary commitments. 

It seems as though Bernie shed more light on the matter while speaking with Al Jazeera UK (via Statesman):

"We’ve been there, years ago, and it’s a little bit like the rest of America, they want to see a profit before they start something and it’s not easy to do that. Ecclestone said, according to the Press Association. "When you consider the country is as big as Europe and we’ve got (eight) races in Europe, it’s difficult. If we had a lot more races there and a lot more television, it would be OK."

KEEP CALM AND RACE ON (shirts available for sale!)

With Bernie's recent quotes in mind, it sounds like these ramblings about money are being exaggerated quite a bit.  I mean, come on; it's pretty obvious that COTA is planning on taking in some profit before the end of the ten year deal with F1. Since this is a private venture with almost limitless potential, one would expect them to build a sustainable business as quickly as possible. Heaven forbid a private company make some profit along the way and reinvest it into the long-term success of the facility! <insert sarcasm>

The bottom line is that only a handful of people know the terms of the contract between COTA and Bernie Ecclestone. The World Motor Sport Council ratified the 2012 calendar and it includes our Austin race at the Circuit of The Americas on November 18. Although we'll probably see more rumors of this type surface before race day, it's important to Keep Calm and Race On.

//Updated to include reference from Austin-American Statesman article, "F1 Boss Makes Waves over U.S. Grand Prix"

"Formula 1 and Circuit of The Americas Ready to Roll"

Adding to the positive news from the FIA World Motor Sport Council meeting earlier this morning, Circuit of The Americas has issued a press release confirming:

COTA has reached an agreement with F1 Management, ensuring the Formula 1 United States Grand Prix remains on the FIA Formula 1 World Championship race calendar.

Bernie Ecclestone "received his check today" (Joe Saward believes the price tag to now be $35MM).

Construction will resume immediately, ensuring completion for the 2012 race date.

Tavo's vision is referenced but as reported earlier, we do not see his information on the COTA website any longer.

You can read the full release here.

Congratulations to our friends at Circuit of The Americas! We are hopeful that the Texas weather will continue to cooperate so construction can progress at full steam ahead.

We are already reading your mind. You're thinking: "When do tickets go on sale!?" You should sign up for their official email list by clicking HERE.

//UPDATE

Formula 1 adds the news to their front page

Austin Remains on 2012 F1 Calendar

More official reports are emerging that the 2012 F1 calendar has been ratified by the FIA World Motor Sport Council at their meeting in New Delhi. This means the Austin Formula One race scheduled for November 16-18, 2012 officially remains on the calendar. This is also an opportune time to mention that it was never officially removed from the F1 calendar, despite rumors and gossip over the past month amidst what we believe to be heavy negotiations.

Official Press Release from the December 7, 2011 World Motor Sport Council meeting is here.

While we share in the excitement and relief of this announcement, it will be interesting to continue to see what announcements are made over the next 12 hours; it is 5 o'clock in the morning in Austin, Texas and we expect further details to emerge from Circuit of The Americas. What sort of deal was reached with COTA and F1? Was Tavo Hellmund involved? Will construction resume immediately? Is it feasible to complete the Circuit in time for inspection ahead of November 16, 2012? Have local hotel rooms been released for anxious travelers to book up?

As you've come to expect...stay tuned!

Nick Craw meets with Formula 1 United States team members as well as local, city and state officials and gave the project development plan his approval and a strong “thumbs up”. Nick Craw, ACCUS President for the US, Senate President of the FIA; Tavo Hellmund, Chairman of the Formula 1 United States; Peter Wahl, Managing Partner of Tilke GmbH. Taken 21 October 2010.

Formula 1 Re-Signs With Austin for 2012

// FORMULA ONE CONTRACT SIGNED

We have recieved confirmation from our reliable sources that Austin is a go for 2012, but there will be some changes with the various partners involved.  These details will likely make their way out in the next 12 hours, so at this point we are still unclear what issues were resolved with the revised contract.

Needless to say, it's been a roller coaster ride the last few weeks with the statements by Formula 1 head Bernie Ecclestone and Circuit of The Americas, regarding the fate of Austin's future race.  Tavo Hellmund's press conference also made it clear that there were some serious issues that needed to be worked out within the COTA organization, but the parts of the puzzle are still yet to be solved.

//UPDATE 01

Pit Pass is also reporting from their sources the same confirmation.

Stephen Cole Smith at Autoweek also reporting that a deal may be reached.

//UPDATE 02

 Peter Habicht of F1US.co pointed out that the Circuit of The Americas website no longer lists Tavo Hellmund as a partner; he was previously listed as "Founding Partner."  Very interesting...

//UPDATE 03

Andrew Benson (BBC), Alan Baldwin (Reuters) and Adam Cooper are stating that an unchanged 2012 F1 race calendar has been released but not yet confirmed by the World Motor Sport Council. We'll continue to stay on top of this.

//UPDATE 04

Offically confirmed by Circuit of The Americas and Formula 1: Details here

Ecclestone Softens Up: One More Week for Austin

We were all lead to believe that today the world would learn the real fate of the Formula One United States Grand Prix in Austin. Formula 1 CEO Bernie Ecclestone has made it public that Circuit of The Americas investors needed "money and a pen," but now he tells the AP that "the deadline hasn't been met so we are still trying to make it happen."

Whoa - before it was "Deal or No Deal" - "If you don't meet the deadline, no deal" and now it's "the deadline hasn't been met, so we'll still work towards the deal"?  This is quite a drastic shift and maybe a sign of Bernie's secret soft spot for the US, despite the many rollercoaster comments over the last month. 

Now, I wouldn't go so far as to suggest that we won't get our fair share of negative speculation until the World Motorsport Council meeting next Wednesday - the revised deadline for Circuit of The Americas to sign Bernie's contract - but I would suggest that the seemingly disinterested Bernie is not as done with the prospect of our race as most media portrays.

As we highlighted before, Bernie is often known for this flamboyant use of negative vocabulary for the sake of hardball negotiations when millions are at stake.  As long as negotiations are underway, he'll continue to use media as a heavy-handed tactic to put pressure on other parties.  Joe Saward published a nice piece and looked at these tactics with Bernie's latest victim: western European tracks like Belgium, Valencia, and Barcelona just to name a few.  He urged readers to consider that Bernie is a master of his art; he chooses his words wisely and doesn't casually comment on something. He specifically picks the media outlet to discuss and convey the message he wants delivered.

It's still unclear what lead to today's delay in the delivery of the contract to Formula 1, and what outstanding issues need to be resolved between Bernie, COTA and promoter Tavo Hellmund.  Since Tavo's press conference a few weeks ago, we haven't heard much about the relationship with the Circuit investors and his involvement, if any, with the re-negotiations of the revised contract.  Given the difficulty in getting a new contract signed, we do however speculate that Tavo is actually the missing piece of the puzzle, and like Adam Cooper's interview with Bernie earlier this week, Bernie has a softspot for Tavo that has been undermined by the negotiations with COTA, whether on purpose or not, and his involvement in the Formula 1 contract may be more of a requirement than a preference.

So what's next?  That's a good question, and likely to be much more complicated that we wish it would be.  Is sending a briefcase full of cash going to solve the problem?  Not likely; there must be some terms in the Formula 1 Contract that are causing concern on both sides.  Whether they can reach an agreement before the revised deadline remains to be seen, but the movement of the deadline alone suggests that things are progressing.  Since we don't see Bernie as the type to change terms last minute to benefit the other party, there must be a reason for the change which could well benefit our Austin race.

Circuit of The Americas Ready to Deliver $25 Million

Special Delivery for Mr. EcclestoneCircuit of The Americas has issued a bold statement on this Thanksgiving holiday: we have the cash to pay Formula One Management's 2012 race sanctioning fee and we've met the contractual requirements to proceed with our race. Now, it appears that the ball is in Bernie's court to countersign the contract. Here is the release:

Circuit of The Americas Ready to Pay Sanctioning Fee and Offering More

Proposal Satisfies 2012 Request, Accelerates Payments for Subsequent Years

AUSTIN, Texas - November 24, 2011 - Circuit of The Americas has responded to Formula One Management's contract requirements by agreeing to an immediate cash payment of the sanctioning fee for the 2012 United States Grand Prix (USGP). In addition, Circuit of The Americas has offered to establish an advance payment schedule for USGP races beyond 2012. The offer comes after several weeks of talks, and once accepted, will secure the USGP on the Formula 1 race calendar.

 "We have been ready to send Mr. Ecclestone a sanctioning fee check for some time now," said 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. 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."

We have been anticipating Bernie to make an announcement about our Austin Grand Prix this weekend, during the last race of the 2011 season from the Brazilian Grand Prix.

What is most interesting to us is that COTA has confirmed the viability to pay the 2012 race sanctioning fee immediately with $25 million in cash. You will recall, that the Comptroller of the State of Texas, Susan Combs, recently retracted her offer to pay Formula One Management its $25 million sanctioning fee in advance of the race. She explains the change of events in an interview with local Austin news channel KVUE; you can watch the unedited version of the video by clicking here.

How will Bernie respond? What role is Tavo playing going forward? With the recent halt in construction, is it feasible for us to finish the track in time for our slated November 18, 2012 race date? These are still real questions that will be answered in due time, but we feel reassured that our investors have answered Bernie's recent demands by committing the payment and contract.

As Will Buxton told us all back in June, we all want the 2012 race to happen, so let's MAKE IT HAPPEN!

Don't forget, we have our last downtown watch party of the 2011 season back at Six Lounge this Sunday. We'll kick things off at 1:30 PM with food from Pluckers Wing Bar and drink specials from Red Bull and Pepe Z Tequila. Come ready to race because Robert DeGroff will have his ever popular iRacing simulator on hand for guests to take for a spin.

Sunday, November 27, 1:30 PM

Six Lounge, 117 W. 4th Street, Austin

Free and open to adults over the age of 21

Facebook Event Invitation here

Hope to see you all this Sunday, and Happy Thanksgiving to our American friends!