AUSTIN, TEXAS - The pavement hasn’t been laid down on Austin’s taxpayer subsidized Circuit of the Americas race track and already it has an unwelcome competitor. New Jersey.
Formula One boss and multi-billionaire Bernie Ecclestone is expected to announce a second U.S. race with the Manhattan skyline as a backdrop in its latest attempt to crack the American motorsport market.
The Austin F1 track was sold to Texas taxpayers on the basis that it would mark F1′s triumphant return to North America and that the race would lure wealthy race fans from all over the world.
But now it looks as though the Austin race will take a back seat to the New Jersey race that will occur earlier in the season.
To make matters worse, New Jersey taxpayers won’t have to pay a dime for their F1 race.
Texas taxpayers have been saddled with paying F1 promoters $250 million dollars spread out over 10 years. The money is coming from a state trust fund set aside to subsidize large events or attractions that lawmakers feel will benefit Texas. Austin is on the hook for an additional $40 million.
Open wheeled auto racing is a niche sport in the U.S. Two open wheeled race series, Indycar and CART, merged two-years ago because there simply was not enough sponsorship money, fans and TV viewers to support both of them.
The combined Indycar still struggles to fill the stands and more importantly, to attract a TV audience. Open wheel racing has not been able to compete with NASCAR.
NASCAR races air on Fox and ESPN and compete with NFL audiences. Indycar races air on the lightly watched Versus cable network.
Formula One is even less popular with American race fans than Indycar, so its success in New Jersey or Texas is not certain.
F1 has raced in the U.S. before, but it has always failed to capture a sustainable fan base. F1 is often times compared to European soccer. It’s just something Americans aren’t all that interested in.
The announcement of a New Jersey race will certainly fuel F1 critics in Texas who have questioned the wisdom of building the $300 million taxpayer subsidized race track rural Travis County.
The Austin race will now likely play second fiddle to the New Jersey race. The New York TV market is the largest in the country and it’ll be easier for F1 to get more fans to the race then it will be to get them to a remote area outside of Austin.
Local critics have assailed the F1 race as epic government crony capitalism and that a state saddled with debt and dwindling resources shouldn’t be risking tax dollars on a race series that has failed in every U.S. city it has been tried.
Austin attorney and vocal F1 opponent Bill Aleshire told the Texas Senate Finance Committee in February, “The last thing we want to do is tax fellow Texans on their home turf and give the precious revenue to Formula One promoters.”
“This is a liar’s loan in the form of an economic development incentive done merely by inflating (projected) attendance and spending.”
The deal is now done. Texas tax dollars have been committed, so there is no turning back.
The lingering questions facing F1 proponents is, will Austin attract the number of fans it projected in obtaining the $250 million now that it has a sizable competitor in New York and New Jersey?