The check's in the mail....or not

[rebelracewriter]

http://www.mystatesman.com/news/sports/motor-sports/circuit-hasnt-paid-f1-hosting-fees-is-given-extra-/npPyQ/

The hole just keeps getting deeper.....

 

Here's the story for those of you who are not paying customers of the Statesman-American online version:

 

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Circuit hasn’t paid F1 hosting fees, is given extra time

 

By Christian Sylt - Special to the American-Statesman


The organizers of the U.S. Grand Prix have not paid the hosting fee for the just-completed race, and Formula One boss Bernie Ecclestone says he is giving the Austin group more time to cope with a decrease in state financial support.

 

The hosting fee comes to an estimated $33 million and is due to be paid in the run-up to the race, which took place Oct. 25 at Circuit of the Americas.

 

The payment terms for races are outlined in the prospectus for the planned flotation of Formula One on the Singapore stock exchange, which stalled in 2012 due to a financial crisis. On Page 91, it states that “payments are often received in advance of the event thereby contributing to our favourable working capital dynamics. This is particularly the case for flyaway events, the fees for which typically fall due three months before the relevant event.” Flyaway races are ones outside Europe, such as the U.S. Grand Prix.

 

But instead of paying three months early, the Austin race organizers still have not paid one month after the race.

 

“We said they can pay late this year,” Ecclestone said. “They get money from the state, and the money from the state is late, so that’s why they are late.”

 

Circuit of the Americas receives millions from a state fund set up to attract major events to Texas. In turn, the track pays the race hosting fee to the F1 Group, which controls the sport’s commercial rights and is run by Ecclestone.

 

The holdup has been caused by a change to how the state support is calculated. The annual payment to the circuit is based on estimated sales tax revenue generated by the race so that the state doesn’t lose out. Since the U.S. Grand Prix premiered in 2012, the circuit has been paid about $25 million annually, corresponding with the original race hosting fee charged by F1.

 

That hosting fee increases 10 percent every year, and the state this year cut its contribution to the race to $19.5 million.

 

The state this year used a different method to calculate the economic impact of the race, as control of the major-events incentives shifted to Gov. Greg Abbott’s office. Previously, state Comptroller Susan Combs had administered the fund; she and then-Gov. Rick Perry backed the initial deal that brought F1 to Austin, but both left office in January.

 

The drop in state backing drove Circuit of the Americas Chairman Bobby Epstein to tell the American-Statesman last week, “I think we’re screwed. … The state clearly made promises. I think we made a deal, and we lived up to our end of the deal.” He added that the “big question” is “is the race coming back?”

 

Epstein reiterated Tuesday that paying late will still be a struggle if the circuit doesn’t get more money from the state. “It’s OK paying after the race, but if they don’t give you enough to pay the sanction fee, you still can’t do it,” Epstein said.

 

It remains to be seen whether the circuit will take legal action, but Ecclestone is confident it will be resolved.

 

“The person who dealt with this in the first place is no longer there. The governor is no longer there. So they have got new people, but they should pay what was agreed,” Ecclestone said. “I think we will get the funding back on track again.”

 

Meanwhile, Ecclestone has said he is looking at alternative venues in the United States and is considering a race in California. He also has a reserve plan as a Grand Prix in the oil-rich nation of Azerbaijan will debut in 2016. So even if there is no Grand Prix in the United States next year, F1 will not be down a race.

[AustinF1]

Bernie is trying to get paid for the 2015 race, and this seems to be the only way that might happen. Notice Epstein talking about how he still can't pay unless the state pays the full $25M?

Also, Adler says the City can't help COTA.

Mayor: F1 can't look to Austin for US Grand Prix bailout

http://www.sunherald.com/news/politics-government/article44758635.html#storylink=cpy

According to that article, there's a document that says the state isn't obligated to pay the full amount and it's on the track to make up the rest in that case.

[racer61]

Poor business management

[rebelracewriter]

Poor business management

Far beyond that Cory.....