09/07/2012
NEWS STORY
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Over the past few months there have been numerous reports of difficulties being faced by the promoters of the Grand Prix of America which is planned to take place in New Jersey in June next year. The project got off to a fine start with a glitzy launch in October and just last month world champ Sebastian Vettel drove a lap of the planned circuit route as part of a PR stunt. However, these media events couldn't stop bad news leaking out.
First, Formula One's boss Bernie Ecclestone was quoted saying that the Grand Prix could be moved to 2014 then he told Pitpass' business editor Christian Sylt that the promoters were paying penalties for being late on their contract and, most recently, he said that there will "definitely" not be a Grand Prix there next year. After each claim the promoters have released a statement saying all is well yet they have not once said how much money they have raised to host the race or where it is coming from. This could well prove to be crucial.
Observers in the US have compared the situation to the other F1 race in Austin which Ecclestone threatened to remove from the calendar several times before it paid him the £16.1m ($25m) hosting fee. However, in reality, the two are very different because right from the start the promoters in Austin not only revealed who would provide the investment for building their circuit but also explained that there was a plan in place for the state of Texas to cover the hosting fee. All we have heard from New Jersey is that it will not be state funded.
A more appropriate comparison may be Leicestershire's Donington Park circuit and the reason for this is the timing. Whilst the United States Grand Prix will take place in Austin in November, the Grand Prix of America is slated for June next year. It is one month before the British Grand Prix takes place and in 2010 this was meant to be held at Donington. The promoter missed the payment deadline for the race fee several times and Ecclestone cut him slack as he has done with New Jersey. Just like New Jersey, Ecclestone had his heart set on a race at Donington largely to teach a lesson to the British Racing Drivers' Club (BRDC), owners of the rival Silverstone circuit. It is well known that Ecclestone has long hankered after a race in the New York area which explains why he hasn't taken action despite the promoter being late with the contract.
However, Ecclestone has his limits and Donington reached them at the end of October 2009 when he finally cancelled the race there. It was due to take place in July 2010 whereas the Grand Prix of America has a June date so, by this reasoning, the promoters can expect to have until the end of September to pay up or face being moved to 2014. That gives them three months from now. The alternative could be pushing back next year's race date but, going by Ecclestone's recent comments, it looks like he favours moving the race to 2014 if necessary.
Presumably the Grand Prix of America would benefit tremendously from Ecclestone offering to waive the hosting fee and cover the running costs of the race as he has done with the mooted London Grand Prix. In fact, many F1 insiders have said for a long time that this is precisely what the sport needs to do to crack the US market. Indeed, given how widely-known F1 is in the UK it seems absurd that it would offer such tremendous financial assistance to a race in London whilst one with the Manhattan skyline in the background gets none of it.
Sylt's conclusion is that if F1 has to waive the fee and cover the running costs of any race then it makes a bit of a mockery of the sport's business model so if this is what a Grand Prix in London needs to get off the ground then it really shouldn't ever get on the calendar. Time will tell whether New Jersey keeps its slot next year.