Ingram: ‘Silicon Hills’ Right For F1?
By Jonathan Ingram | Senior Writer
Is the city of Austin the right location for Formula One’s return to the U.S.?
Including other major Texas cities, Austin is certainly a market big enough to host F1 and brings with it the allure of the American West, old-fashioned cowboy values and a new-fangled high tech image as well. What’s wrong with this picture? Not a single party in the 10-year agreement to bring F1 to Austin has said anything about the money.
When F1 went to the Indianapolis Motor Speedway 10 years ago with its seating close to 200,000, nobody had to worry about the financial side of the deal. There wasn’t any concern that the Speedway could pick up the tab of the rights fee, $12 million at the time, and perhaps make it work in terms of ticket sales. Until the tire debacle and six-car “race” in 2005, the track in fact did well with its ticket sales.
Alas title sponsorship – where 60 percent of the money went to the party bringing it in and 40 percent to the other – was not found by either Indy or FOM.
This time around, F1 continues to need America included in its schedule, despite mutterings to the contrary from various quarters of the American media who are outside the loop. Insiders at US F1 say that the reason US F1 was chosen as one of the new teams for 2010 had more to do with the desire to have a presence in America than the applicant, the recently sundered Ken Anderson.
The pressure to come back to the U.S. comes from the participating teams in F1 led by Ferrari, as well as the sponsors and the owners of the commerical rights at CVC Capital Partners, which needs to pay down debt and bond obligations from its $2.5 billion purchase of the rights in late 2005. That purchase was re-modeled into holding company Alph Prema, where Formula One Management’s Bernie Ecclestone is the CEO and a stakeholder. Since then, the need for increased revenue has fallen largely on the shoulders of new applicants to the schedule in deals negotiated by Ecclestone.
It remains to be seen if the choice of Austin and “Silicon Hills” turns out to be much like the FIA’s choice to include the now stillborn US F1 on its list of new teams for 2010. Did the Texas city get the nod because it is the only applicant in America that had any chance on paper?
In another similarity to US F1 that is eerie, one has to wonder if the promoter in Austin, Tavo Hellmund, is as awkwardly askew as Anderson when it comes to sponsor prospects and investor probabilities in this scheme. A glance at the comments section in the Austin American-Statesman confirms that spending local tax money for the rights fee commanded by F1 in the current economy would be regarded as a boondoggle – as would a publicly funded track and facility on the scale of those recently built in the Middle East and Asia. The rights fee for the Abu Dhabi race was reported to be $45 million and last we heard there’s no sliding scale for less prosperous locales.
One wonders if the name Donington Park ever surfaced during negotiations in Austin? You know, the lovely British track that had F1 ambitions until it ran out of money simply refurbishing its facility.
If it’s too much folderol for people in the business of motor racing 24/7 at Indianapolis to bring back F1, perhaps that’s another sign of the degree of difficulty.
The real story may be found elsewhere when it comes to America in F1. Now that Ferrari’s Luca di Montezemolo is admitting to dreams of a third American-sponsored Ferrari, it seems clear that something is in the works regarding US F1’s primary investor Chad Hurley and YouTube. Hurley’s principal representative for all things F1, Parris Mullins, has acknowledged he’s in talks with interested parties on both sides of the equation – existing teams and sponsors from Silicon Valley – about a deal that would return America in one form or another to F1.
If one had to guess – and that’s what it is – Mullins’ group could gain a stake in either of the existing Ferrari-powered teams at Toro Rosso or Sauber. That would put it in line for customer cars from Ferrari, which appears to be the angle that Montezemolo is working on to reverse the tide toward new teams that may or may not be qualified to build their own cars. As of now, customer cars are not legal. This move to customer cars would also try to reverse the political tide within the FIA toward cost controls imposed on teams, the idea being that revenue for customer cars would help sustain the core teams.
As for Austin and F1, I’d love to see a race there. I used to live in Austin (when the population sign at the edge of town still listed 104,000 and the hippies and freaks went skinny dipping at Lake Travis and the well-to-do went skinny skiing.) It’s a fabulous location for an F1 event due to its music heritage and image of “Silicon Hills.” The race would be highly likely to be well received and well attended by those in the mythically landscaped Texas Hill Country as well as the surrounding major cities.
I’d be more than willing to help out by chipping in for the beer for any media who would like to meet at Kenneth Threadgill’s old hangout on North Lamar prior to the race to reminisce about the days of Jimmy Rodgers, Hank Williams, Kenneth himself, Janis Joplin and Keke Rosberg, the F1 winner in Dallas way back when. Should the juke box break down, there’s plenty of new talent in town.
Let’s just hope the commercial bus with promoter Hellmund at the wheel doesn’t break down before it gets to the starting line.
– Jonathan Ingram can be reached at email@example.comOne Comment