Thursday, October 14, 2010

Why the track will be built

Since everyone is talking about why F1 will fail in Austin I’d like to talk about why it will succeed where so many others have failed.  While the announcement of an F1 race in the U.S. came as a surprise to no one, the site of that race and the fact that a new track will be purpose built raised quite a few eyebrows.  It hasn’t taken long for the detractors to start pointing out every possible reason why it will fail.  To be honest, I was one of those people at first.  I was at the pseudo-race at Indy in 2005 and when F1 left the Brickyard 2 years later I thought we wouldn’t see another Grand Prix in the U.S. for 25 years.  In fact, that debacle and the ensuing political strife in F1 all but ruined the sport for me.  I went from watching every single race live, no matter the hour of broadcast, to swearing off the sport altogether.  I felt betrayed and wanted nothing more to do with the sport that wanted nothing to do with those of us here in the States.
A few weeks before the big announcement I heard from a pretty reliable source that Austin would be hosting the race and until the day of the announcement I was pretty sure I was going to end up on Punk’d.  When Ecclestone dropped the bomb on the F1 community I said I’d believe it when I saw all 20 cars lapping the field and not just 6.  I joined other fans in recalling other starry-eyed promoters who attempted to lure the sport only to end up with their faces in the gravel pit.  Yet, I couldn’t help but think about the possibilities and all that thinking made me realize the potential this city holds and what a purpose built track could do for making it successful well into the future.
The first key reason it will succeed is location.  Texas is the 12th largest economy in the world based on GDP.  Austin is the 15th biggest city in the U.S. based on population (hard to believe isn’t it?).  The 4th, 7th, 9th and 17th largest cities are all within 3 and half hour’s drive (San Antonio is barely an hour and a half away).  The value in these potential markets is huge.  What’s more is that Austin is growing and set to continue doing so in a big way.  Stop thinking of Austin as a small town for musicians and college students - it’s a major city and it won’t be long before you cannot ignore that.  Austin’s proximity to our southern border also makes it a great way to tap into the enormous F1 market in Mexico, which hasn’t hosted a GP since 1992 and seems unlikely to do so anytime in the near future.
While location may be the first reason worth noting it is by no means the most important.  F1 never succeeded in America because it never had a home in America and with the vast majority of motorsport fans in America gravitating towards ovals, the sport never really had a chance to find a home.  Several bad street circuits and one poorly thought out trip to a parking lot in Vegas show the lack of real commitment.  I thought that had changed when F1 came to Indianapolis Motor Speedway, the spiritual home of racing in America, in 2000.  It seemed perfect then but hindsight is 20/20 and now it’s possible to examine all the reasons it failed there.  The debacle in 2005 is definitely a key reason, too may fans like me felt betrayed by the sport and couldn’t help feeling like F1 didn’t really care to be here anyway.  When Tony George, the president of IMS, and Bernie Ecclestone, the commercial rights holder of F1, couldn’t come to an agreement to continue the race it seemed as if F1 was destined to fail Stateside.  Yet the truth is that the track was simply too schizophrenic to be truly great.  It might have looked more professional than the infield at Daytona but it was still just that - an infield.  It had such a drastically different character from the rest of the track that it never made sense.  It’s a shame the race didn’t succeed but it won’t be returning to IMS and there’s no point in dreaming about it.
As Ecclestone focuses more and more on making F1 a truly world championship the need for an American race grows greater and greater.  There are 19 different tracks on the 2010 Formula 1 calendar.  Six of the nineteen F1 tracks on the 2010 calendar are less than 3 years old and are in countries that have never before hosted an F1 race. A purpose built track, made specifically for Formula 1 with the benediction of the powers-that-be, is a reason to get excited.  Much has been made of the fact that this will be the first purpose built F1 track in the U.S. but many people don’t realize what that means.  The issue with F1 coming to America isn’t the quality of our road courses (nobody can say Laguna Seca is a boring track) but the quality of their facilities.  The nature of the F1 beast has continually demanded better facilities for teams and spectators alike.  What the paddock requires in terms of technology, quality, space and yes, even luxury will astound industry outsiders.  Just take a look at each team’s “motorhome” hospitality suite to get an idea of what I’m talking about - there’s serious money here.  While Austin’s track won’t be the only American track capable of building these facilities it seems likely to be the only one to do so to such a high quality.
Of course this all only matters if the track is built, something that many pundits still believe is highly unlikely.  I personally do not believe that the people involved in bringing the race to Austin are naive, overly optimistic or in any way stupid.  They’ve done the numbers, they know the difficulties, they’ve accounted for problems and they’ve laid a groundwork.  I also believe that despite the “Keep Austin Weird” motto that is such a part of our lifestyle the city itself needs the potential revenue.  And what a source of revenue it is!  It is estimated that the race could generate anywhere between $200 and $400 million.  Just for a sense of scale - that’s more than an entire season of UT football and the South by Southwest music festival combined.  If the race succeeds and becomes a fixture here in the U.S we can even see that number increase.  This estimate also does not take into account the addition of other racing series like the American Le Mans Series, Grand-Am, IRL and yes, even NASCAR, all of which could bring in a great deal of additional revenue.
The addition of such a world-class facility also creates a great deal of other developments.  Hotels, restaurants, housing, schools etc. are all created, which means more jobs, more- well you get the picture.  If the track site is where many expect it to be out near Austin-Bergstrom International airport it’s also a great way of pushing that development out near the new 130 tollway.  So far this road has been a colossal waste of money and pushing development out here will help justify it’s expense.  The City of Austin and the State of Texas want this race to happen.  The Texas Major Event Trust Fund can help ease any financial strain by bringing state money into the mix.  There are more reasons this will work out than reasons it won’t and I believe that most detractors of the race simply can’t get around the idea that a city like Austin would get the race.
Of course there’s far more to talk about with concern to this track and the Formula 1 World Championship but that will all just have to wait until next time.