The idiot’s guide to building race tracks and owning F1 teams

6/28/10 Ralph Barrera/AMERICAN-STATESMAN; Tavo Hellmund is a longtime Austinite who is the brains behind bringing Formula One racing to Austin in the near future, brokering behind-the-scenes million dollar deals. (Maher story)

6/28/10 Ralph Barrera/AMERICAN-STATESMAN; Tavo Hellmund is a longtime Austinite who is the brains behind bringing Formula One racing to Austin in the near future, brokering behind-the-scenes million dollar deals. (Maher story)

There is a serious piece of advice contained within the well-worn adage about the quickest way to become a millionaire in Formula One – is to start as a billionaire. This wisdom has evaded many, just ask Tony Fernandes. Yet in the week where one of the two COTA owners admits publicly, “we’re screwed” and he questions whether F1 will ever return to COTA, one man seems to known how to play F1 games.

Tavo Hellmund; son of Gustav who was a great friend of Bernie Ecclestone, will be sniggering behind the back of something whilst watching COTA crash and burn at the hands of his former partners. Hellmund persuaded Bernie Ecclestone to give him a contract for a race in Austin Texas, sketched out the design of the circuit on a napkin and sourced Epstein and McCombs to invest in the COTA project.

With the Austin circuit build under way and the details for the F1 race fleshed out, McCombs and Epstein decided Hellmund did not deserve a slice of the action, because he hadn’t put up any cash. Tavo was booted out, Ecclestone was not amused, though he gave McCombs and Epstein a new contract for COTA but with less preferential terms than the previous one. Most importantly, no regional protection was guaranteed against competing F1 races.

According to Epstein, COTA appears to be bust. Meanwhile, Tavo Hellmund’s next project, the refurbishment and renewal of the Autodromo Hermanos Rodrigues, saw the biggest F1 attendance over a race weekend for years. Irony, Karma… whatever it is.. the timing is comic.

Tavo Hellmund is currently working to bring another new circuit in the USA to Formula One. He is working with Californian investors who, “own some of the land but not all that would be required,” reveals Hellmund to the Statesman. Acquiring the rest of the site to build a new F1 circuit and getting the appropriate permits are the current obstacles in the way of it moving forward more quickly.

Once again, ‘Tavo the smart’ is primarily using other people’s money to further the cause of a new circuit. McCombs and Epstein’s reported $400m spend on COTA, is not looking so clever at the moment.

But why stop there? Hellmund is now heading up a consortium of investors including James Carney, in an attempt to buy Manor F1 for 2016. Given the rules regarding new entrants, Manor is an interesting proposition because it is guaranteed FOM payments for the next two years, whereas given the convoluted manner in which F1 funding is awarded, the Haas F1 team will get little funding before the beginning of their third season.

Tavo has already been playing the ‘all American’ card when he told the Statesman he’d like to get NASCAR’s Dale Earnhardt Jnr behind the wheel of his F1 team’s car, possibly alongside Alexander Rossi because, “has the resume.”

Hellmund the younger clearly has his feet on the ground in terms of race team ownership when he states, “We’re never going to spend $400 million a year like Mercedes, Red Bull, Ferrari and McLaren. But we think you can run it respectably and not be in the red. I think you can fight for fifth.” Somewhat whimsically, Tavo reveals his interest in buying Manor F1 was sparked when he heard the news they would be running a Mercedes engine in 2016 and beyond.

Manor F1’s owner, Stephen Fitzpatrick, has already turned down a $50m offer from Tavo and his financiers given that this is the cost of the team to Fitzpatrick to date. Yet Fitzpatrick has allowed Hellmund a period of exclusivity to perform proper due diligence on the Manor finances.  But time is of the essence as Hellmund indicates, “I think if we get to late January or February, it may be too late, and my partners and I would probably lose interest”.

Maybe someone close to Fitzpatrick should suggest to him that breaking even on his 2015 racing car adventure – is not too shabby a return, for anyone who has ever owned an F1 team.

Further, it could be that Tavo Hellmund is about to pull off the build of a new Californian race track and the acquisition of Manor F1, without having to call his bank manager to arrange a transfer of funds.

 

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10 responses to “The idiot’s guide to building race tracks and owning F1 teams

  1. So through his relationship with Bernie (and obviously good business acumen), Hellmund is basically emerging as a top F1 consultant to various potential stakeholders?

    • Seems like just another swindler to me. Good at business for himself, but those COTA shareholders probably think otherwise now. These new “investors” should google him.

      • Let’s see, Tavo spent years putting the Austin track together. Spent a lot of his own money, flying to Europe to negotiate with Ecclestone. Put together enough investors to build a world class facility. Delivered everything he promised. Then was forced out, several months before the first race ever happened.
        Swindler, must have a different meaning, than the one I know.
        I bet, some of those investors, wish he was running Cota.
        But, everyone is entitled to their opinion.. No matter how uninformed they are.

  2. I wonder, If Tavo can help pull off acquiring an F1 team, will he jump in the seat and hot lap that car somewhere?
    He is a damn good shoe!
    He has come a long way from, promoting a USAC midget and Camping world west series truck race, on a 3/8th mile track in Kyle Texas .
    I always thought he was crazy, but I never doubted him.
    And I, for one couldn’t be happier for him and his wife. They beat the pavement and put in countless hours for years, getting where they are. And the best thing is, they are great people!

  3. Why fund a new F1 track when you know that it will at best be marginally profitable to hold the race?

    • I think I would answer that by saying, they are not building an F1 track. They are building a multi-purpose racing facility.
      You will not make money off of F1.
      But, you can use F1 to attract, many other profitable events to your venue.
      Track days, club racing, vintage racing, manufacturers, and team testing, as well as conventions and corporate rentals.
      I think, a well managed venue, with long term goals, should be sustainable.
      After a period of time, paying off debt, I think it would be realistic to think it could become profitable.
      But, if the business plan is to live or die by F1, that’s a pretty poor plan

  4. My concern is that every crazed eco-freak in California will flock in and squawk about anything and everything done on-site–any digging, any piling up, any removal of trees, brush, bushes, laying of asphalt and concrete, and then they will “find” or claim to have found an “endangered” or “threatened” species of insect, reptile, small animal, bird, plant, bacterium…

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