Formula One’s US GP was a ‘financial disaster’ for COTA

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As sure as eggs are eggs, this year’s US GP was going to leave the race promoters with significant losses from the moment it was scheduled back to back with the revived Mexican GP. TJ13 reported last week that in previous years, local estimates have Mexican fans making up around 40% of the spectators in Austin. In the article, The acid test for COTA, we examined the challenge faced by the promotors of the 2015 US GP.

Prior to the F1 event in Texas, the Circuit of the Americas president, Jason Dial, was convinced they would make up the loss from the Mexico based fans with the growth from “other groups of visitors”. Apparently more fans were expected from “California, Florida, New York, Chicago,” and Dial claimed, “we also see increasing numbers from abroad.”

Then down came the rain. At times it seemed the water came in such Biblical proportions, that a fervent evangelical interpretation of the weather would indicate this was indeed judgement from God. Elton John did his best to mitigate the organisers woes as his post-race concert attracted around 40,000 people – claim COTA.

Co-circuit owner, Bobby Eptstein tells the Statesman today that the 2015 US GP was “a financially devastating weekend for the company.” The company operating the circuit was already losing money each year and the owners attempted to sell COTA in the summer.

“We lost millions on concessions,” Epstein added, “and we suffered from some fans having such a bad experience they won’t be back, though I hope we can change their mind.”

COTA have stated the attendance on Sunday was 101,667 — down from an estimated 107,778 last year and 117,429 for the inaugural 2012 race. However, the circuit receives a state subsidy based upon the economic impact of the visitors to Austin who come purely for the F1 event. Hence, they are hardly likely to admit to a devastating collapse in the number of those attending the race.

Whilst Epstein would not give numbers, he claimed the drop in Mexican attendance cost the race promoter ‘millions’.

There are many in Austin who are critical of the giveaway of public money to the circuit, but this deal is clearly the difference between the COTA operating company going bankrupt or possibly surviving. Of all the new F1 circuits, COTA is widely loved by F1 fans, though its F1 future at present looks shakier than ever.

The Formula One circus moves on this weekend to a revised version of the classical Autódromo Hermanos Rodríguez in Mexico City. Tickets sold out in days and despite the expected inclement weather conditions, finance is of no concern to the race organisers.

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11 responses to “Formula One’s US GP was a ‘financial disaster’ for COTA

  1. Public money is a very sticky topic in the US, much more than over here in Europe and even more so when that money is needed to attract a foreign company to their shores, which the FOM clearly is. I don’t know for how long the state is contracted to support the company hosting the US Grand Prix, but I’d guess it won’t be extended after it runs out.

    I guess Ecclestone has been looking for another location in the USA, not because he’d like a second race there, but because he doesn’t want to lose the North American presence entirely. That would really get him into hot water with all the commercial interests present in the sport.

  2. From what I saw from the UK Sky feed, the audience certainly did not appear to “have Mexican fans making up around 40% of the spectators” – and, let’s face, the weather down Mexico way was hardly conducive to travel – so may be COTA is right in saying that the make-up in numbers was arriving from other places. Whether (and that’s sort of a pun) they come back is another thing.

  3. It’s the ongoing law suit COTA is arguing with the tax man that is their biggest difficulty.

  4. I could never understand how the whole upside down dynamic came about between racing series and race tracks.
    as a track owner, I would say “you have a circus with no tent or promotion or hard tangible assets. I got the tent and the promotion and assets to fill your event. that will cost you $20M to play in MY tent, thank you”.

  5. I can certainly attest to the probability of a big drop in Mexican attendance. I live in Monterrey, a mere 6 hour drive away. In the local sports radio station there’s a one hour motor racing program and virtually every caller mentioned how they had to choose between the two races, as they couldn’t possibly afford both. Luckily I don’t have to make that choice, I can’t afford either of them, lol

  6. As usual, these races only make money for Bernie, and his fellow shareholders. All the tracks require subsidy to possibly break even. How many tracks are currently under financial duress? Germany, Italy, Silverstone, and COTA, recently. And there are numerous others that have been under duress in the past.

    For such a rich sport, it always seems under a lot of financial pressure. The only one making money is Bernie. The teams struggle, like Sauber, Force India, Manor, even McLaren! The engine mfrs struggle, like Renault. The tracks struggle. The tv broadcasters struggle. The only one who never seems to struggle financially is Bernie.

    A truly sustainable sport has to be a win-win for everyone, the fans, the race promoters, the teams, the mfrs. The last entity anyone should worry about is Bernie, and yet, he is sucking everyone else dry.

  7. First of all, there is NO subsidy from the Texas Gov’t. The Major Event Trust Fund, METF, in Texas pays back a portion of the Sales Taxes collected from having the event. So, not having the event would generate ZERO sales tax dollars and therefor would be nothing gained or given back. The impact of having the event here is what drives having the METF in the first place. Hundreds of millions of dollars are spent here during the weeks leading up to the race.

    Second, have you seen the attendance of any of the NASCAR races lately? We are in a really long downturn in the economy and when Bubba can’t afford to go see Dale Jr. run in circles it’s probably a good bet any major sporting (racing) event will suffer as well.

    The only way the people win here is to have Bernie understand that he’s killing the sport. The promoters cannot make money so tracks like Emola and Hockenheim will be lost.

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