ESPN F1 [UK]  Junkie Jabber USGP TEXAS, Where's the money?
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USGP TEXAS, Where's the money? |
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Wednesday, 26 May 2010 |
| After spending a little bit of time to let the news of the newly
breaking news story of the United
States Grand Prix, coming to Austin Texas, I began to get a bit skeptical. With
600M F1 viewers watching races on TV, this event would pencil out if the
circuits got the TV money...but FOM gets the TV money.Comment on USGP TEXAS here
The cost of building a brand new permanent circuit like that in
Shanghai, China can be up to hundreds of millions of dollars, while the
cost of converting a public road, such as Albert
Park, into a temporary circuit is much less. Permanent circuits,
however, can generate revenue all year round from leasing the track for
private races and other races, such as MotoGP.
The Shanghai circuit cost over $450 million.
The owners are hoping to break-even by 2014. The Istanbul
Park circuit cost $150 million to build. Average cost of recent
race circuits is $409M USD. (See chart below).
Tavo Hellmund, Managing Partner of race promoter Full Throttle
Productions, is behind this recent deal. Unless there is a HUGE
investor hiding, there is no way Tavo has anything close to that kind of
money, or experience building something of this magnitude. Is it
possible that this deal will be similar to the Korean GP deal and include
Bernie as an investor, sure. But, on the surface there is a lot to
be skeptical of. We all saw how much support Bernie gave USF1 and
the previous USGP in Indy. Good luck!
Comment on United
States Grand Prix, coming to Austin Texas by clicking link. |
Update: Comments:
I think this still suggests optimism on the part of the politicians and promoter. According to your numbers the NASCAR event made ~$100 per person in its first year. Texas is hardcore NASCAR country in a way that vastly exceeds F1 popularity. The F1 race (assuming 100,000 spectators per year) would have to make $100-200 per person for each of 10 years to cover a track cost of $100 to 200 million with 0% interest. Indy, even before the Michelin debacle, was not going to average 100,000 spectators over the 10-year contract.
Here's another way to look at it. Indy did not continue its F1 contract. At that time Indy's F1 track and modifications were already done, so they were a sunk cost that could be ignored when considering whether or not to continue. If Indy sold enough tickets and beer to pay Bernie's sanction fee then the race would have continued. They were consistently unable to do this.
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Last Updated ( Friday, 09 July 2010 )
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