Formula 1 crashing in Texas
What began as a misfire is now in flames. Formula 1 boss (and we do mean “boss” in every “Sopranos” sense of the word) Bernie Ecclestone threw jet fuel onto the fire today when, according to London newspapers, he announced the Formula 1 contract (necessary to run a Formula 1 race in Austin) held by Tavo Hellmund has been cancelled.
Here's what Ecclestone told the Daily Mail:
Then these other people [Circuit of the Americas] came on the scene, saying that they wanted to do things, but that they had problems with Tavo.
They said they had the circuit, and that they wanted an agreement with me. I told them they had to sort out the contract with Tavo, which they said they would.
But that has gone away now because we've cancelled Tavo's contract as he was in breach.
We've waited six months for him to remedy the breach. He knows full well why we've cancelled. He's happy.
Asked point blank if the race would be cancelled if no agreement were reached by December 7th Ecclestone answered, “Yes, it will be, for sure, 100 percent.”
Wait a second… Tavo Hellmund is happy? Now that’s a new take on the situation, and it suggests there is more at play than meets the eye.
Circuit of the Americas appears to have way underestimated the power of Tavo Hellmund, a close, life-long friend of Ecclestone. Without Hellmund, COTA lost the direct contact and Ecclestone’s trust.
Now they need to show him the money.The one thing that is clear is that the U.S. Grand Prix, set to run exactly one year from Friday, may not be dead, but Bernie Ecclestone is reading it last rites.
These other people haven't got a contract. All we've asked them to do is get us a letter of credit.
We are looking for security for money they are going to have to pay us. That is via a letter of credit, normally from a bank.
If people don't have the money they find it difficult to get the letter of credit, and so we don't issue a contract.
After several months of quiet, Austin’s Formula 1 USGP finds itself on the front page all over the world; after all, Formula 1 is a wealthy sport full of gossip and intrigue.
Yesterday the State Comptroller announced she was withdrawing her offer to pay $25 million in state funding before the race, due to questions about the “recently publicized disagreements between the race rights-holder and the circuit developers,” as well as the announcement of an F1 race in New Jersey.
Just hours later, Circuit of the Americas announced they would be shutting down construction of the track until an F1 contract was signed saying, “The delivery of the Formula One Grand Prix race contract will allow construction operations to resume.”
Make no mistake, without Formula 1, the business plan for the track becomes unworkable. No MotoGP or V8 Supercar, not even perhaps NASCAR would be enough to make it feasible.
Tavo Hellmund is the man who brought the dream of Formula 1 to Austin. It was his close relationship to Ecclestone that garnered a contract, and it was his Full Throttle Productions that began the process needed to race. But Hellmund by his own admission is not a track operator. He loves the racing, not the running of the business.
Last week The National, a United Arab Emirates publication quoted him as saying, "I don't plan to be a track operator... My mission has always been to put the whole deal together and get it going and then continue to broaden my horizons."
“Broadening his horizons” might also mean getting paid. Some F1 fans who know how Ecclestone works are postulating that this entire episode may have more to do with Hellmund being paid out by COTA than about the actual USGP.
That truth will be revealed soon. On December 7th, the World Motor Sport Council meets to ratify the 2012 Formula 1 race calendar. If the contract and credit issues are not worked out before that date, the race will not happen.
Ecclestone cemented that fact when he was asked point-blank by the Press Association whether the race would be cancelled if no agreement were reached by December 7th. “Yes, it will be, for sure, 100 percent.” Not much wiggle room there.