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Insider squabbles, flapping lips: Is Austin's Formula 1 U.S. Grand Prix in trouble?

Insider squabbles, flapping lips: Is Austin's Formula 1 U.S. Grand Prix in trouble?

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There have been mixed messages concerning the U.S. Grand Prix in Austin this week coming from the mouths of people who should be “in the know” about the event. As the year’s racing schedules near the end, the “silly season” begins and rumors start to fly. Most concern driver’s contracts, racing sponsors, technical partnerships, etc.; but, the rumors also include racing schedules and circuit contracts with the sanctioning bodies.

Formula 1 events are sanctioned by Formula One Management (FOM), and FOM is run by Bernie Ecclestone. Bernie has effectively controlled the commercial aspects of F1 since 1978 when he earned the rights to sell television contracts for the many Grand Prix's.

Bernie negotiated the 10 year contract for the United States Grand Prix in Austin with long-time friend and Austin native Tavo Hellmund, CEO of Full Throttle Productions. The two have known each other for more than 30 years. As a teenager, Tavo spent some time in Europe in the '80’s working for Ecclestone’s Brabham F1 team. During those years, Brazilian Nelson Piquet won two Driver’s championship (1981, 1983) for Brabham.

Tavo recruited investors Red McCombs (McCombs Automotive Group) and Bobby Epstein (Prophet Capital) as well as others who are unidentified. The group secured the property for the Circuit of the Americas, contracted Herman Tilke to design the circuit, hired Austin Commercial and others to build the circuit and set about their business of promoting the US Grand Prix.

The group faced the usual planning and permitting issues along the way, but overcame most obstacles and began construction around the middle of January, 2011. Construction progress is steady and the landscape is beginning to take on the shape of the circuit. Everything is looking just fine.

 Rumors are commonplace in F1, and sometimes they do carry some truth. 

But recently, rumors began to circulate about the Austin F1 event. The first bit of news concerned the announcement that Bernie had signed a contract for a second U.S. race on the waterfront of the Hudson River in Weehawken, New Jersey, a site with striking views of the Manhattan skyline. The announcement came as a surprise to many people, as New Jersey had failed several attempts to secure a deal. The announcement may also have spooked some investors involved with the Austin project who questioned whether or not the Jersey deal might erode the value of the Austin USGP.

Tavo didn’t appear to be too concerned as he was one of the first to publicly congratulate the New Jersey effort. "I want to extend my congratulations to Leo [Hindery] and his team, as I know how much work they have put into making this happen," said Hellmund. "When I walked the site a few years ago, the site's potential was obvious.

"I am excited for the East Coast and feel Tuesday's announcement is yet another acknowledgement of the viability, fan interest, economic benefits and prestige an F1 Grand Prix event brings to a region.

"New Jersey and Texas, nearly 2,000 miles apart, offer unique and very different fan experiences destined to not only raise the visibility of the sport in this country, but also increase the global attraction and US support of these world-class events.

"These two regions are going to be terrific backdrops for the world's most advanced form of racing."

Then a few days after the New Jersey announcement, Bernie opened his big mouth, as he is known to do, and created a stir when he said there were “problems in Austin.” Ecclestone reportedly informed team bosses during the Indian GP that there are minor question marks about the race in Austin. "I don't think they are struggling [with building the track] at all," he explained. "I think there has been a disagreement inside the company."

Well, thanks a lot Bernie. Ecclestone managed to say just enough to create a huge rumor, but not enough to give anyone any real idea what he was taking about.  Three time driver’s champion and F1 ambassador Jackie Stewart also had a comment on the US Grand Prix's. "I think it [New Jersey GP] is great, but I am a little bit confused, there seems to be a sudden silence about Austin," said Stewart in India on Thursday. "I haven't heard a word about Austin for months now. I am assuming that it is still very much on, but you would have thought with only 12 months to go there would be something going on”.

My, my, another well-known big mouth chimes in and provides no facts but does manage to fan the flames. I respect Jackie a lot, I have met him several times, and he has done great things for F1, but please!

Meanwhile, architect Herman Tilke had a few comments of his own about the Austin circuit. His engineering and architectural team has been working very hard on the circuit for well over a year. Some rumors started a few months ago when construction slowed to a crawl. The slowdown was blamed on the early completion of the site’s “dirt work,” but others in the rumor mill said that there was a cash flow problem and squabbles inside the management team, possibly including investors.

The questions intensified when Tavo reportedly inquired of the State Comptroller’s Office regarding a change of management and the effect that change would have on the $25 million special events funding from the state. But, this week Tilke said the circuit construction was on schedule and things were going well. "We are working on it," he told Autosport. "There are a couple of hundred workers on the site, a lot of machines, and everything is on schedule up to now."

All of these rumors may be true, or none of them may be true. I have been unable to confirm any of the rumors out of Austin regarding the management team or the investors. Rumors are commonplace in F1, and sometimes they do carry some truth. As an advocate of the Austin GP, I certainly hope that these rumors are just that, rumors.