Formula 1 has a long history in the United States of America. Some of the sport’s greatest and worst moments have all occurred on American soil and the return of F1 to Austin Texas has been, by many accounts, a successful venture.
While the New Jersey Grand Prix is in a state of on-again, off-again status with regards to the F1 calendar, some have voiced an interest in a return to Long Beach California as the West Coast leg of a three-pronged attack on American’s attention spans.
The Long Beach location is now playing host to the Indycar series but that contract ends in 2015 and former Long Beach Grand Prix stakeholder, Chris Pook, has been making noise about a return, which is a bit odd as he is also associated with the New Jersey Grand Prix operation as well.
F1 raced at Long Beach from 1976 to 1983 and Pook was involved then, as he is most assuredly trying to be now. Some 40-years later he’s making noises in the press about working with Formula 1 boss Bernie Ecclestone and Long Beach about doing a deal to bring the race back.
The amount of money needed to host the race is where things get a little dodgy. Some in the press have suggested the cost to be around $100 million but Pook says that’s nonsense, the figure is closer to $9.2 million.
“People have been saying it would cost $100 million,” Pook said, “and that number has just stuck in people’s minds. It’s not even close to that.”
It gets more interesting from there when Pook said the race won’t cost the city anything and that the expenses would be reimbursed. The Orange County Register quoted him as saying:
“The promoters won’t charge the city a fee to conduct the race, and will reimburse the city for all expenses and pay it an administrative fee to cover indirect expenses. Pook said reports of a $25 million fee are in error.
He added that a two-story building would be built along Shoreline Drive adjacent to the garage and pit area that would house F1 operations as well as luxury suites, and it would be donated to the city for use by other events, like the Long Beach Marathon.”
Now, it’s been long known that the sanctioning fee for a F1 race is around $25 million per year with a 10% escalator and the Austin GP tapped into the Texas Major Event Trust Fund in order to pay the fee. Where the fee is getting absorbed for Long Beach is a bit of a mystery for me.
Pook even cited the tax revenue from Austin as a selling point for Long Beach on the kind of revenue they could expect:
“The net tax gain for Austin in 2013 was $4.9 million, and the net gain for Texas was $17.2 million,” he said.
“The value of F1 is that it provides new money,” Pook said. “F1 racing draws a worldwide audience. You would be tapping into new consumers.”
I would really like to see the data on the out-of-state revenue for the Austin GP because the two years I have been there, it seemed like a lot of local and state traffic. Not that there weren’t many attendees from out of the country or state but there was a large contingent of locals or indigenous Texas folk there.
If you look at the offer topically, cost-free and a revenue of $17.2 million in taxes with increased tourism? What’s not to like? Sign us up! I should think the city might want to read the fine print on this one. If there is no sanctioning fee, that would signify a major shift in F1 boss Bernie Ecclestone’s usual deal-maker contract. Something smells a bit fishy and it’s not the Long Beach fish market.