After months of speculation that the U.S. Grand Prix in Austin could be canceled this year, Circuit of the Americas organizers announced Wednesday that their Oct. 21-23 Formula 1 schedule would move forward as planned — and they’re bringing in Taylor Swift to help shake off the organization’s financial woes.
Although the Formula 1 races represent a massive percentage of the Austin track’s yearly revenue, it was unclear for months whether the track would hold the event this year. Attendance at the Formula 1 races has gone down since they began in Austin in 2012. Last year, a massive downpour impacted attendance, and those who did come had to deal with delays and cancellations after heavy rain temporarily turned the track into a river.
Event organizers say that a reduction in economic incentive awards from the governor’s office has dealt a major blow to Formula 1’s viability. The awards send a portion of the state taxes collected during events back to the event organizers. In 2015, the governor’s office approved $19.5 million in incentive awards for the racing event — a significant portion of the total incentive awards granted statewide, but less than the $25 million the race had received in the three previous years.
“To use a technical term, I think we’re screwed,” Bobby Epstein, the Circuit of the Americas CEO and chairman, told the Austin American-Statesman in November.
The grants, organizers say, ultimately benefit the state — they make the event viable, and the event in turn boosts the local economy.
“We’ve been working pretty closely with the state, and I think we understand the calculations better — we have to do a better job of conveying the economic impact to them,” Epstein said.
To that end, Circuit of the Americas hired Angelou Economics, an economic development consulting firm, to help improve the organization’s pitch to the state. “They assured me that they feel pretty comfortable that we can demonstrate that impact,” Epstein said.
Gov. Greg Abbott’s office didn’t immediately respond to requests to comment for this story. Late last year, officials in the governor’s office said the grant to Formula 1 had been lowered due to a change in how tax revenue from such events was calculated.
To make a case for the previous, higher level of state funding, Circuit of the Americas made several investments in this year’s Formula 1 race — hoping to attract more out-of-state attendees and the accompanying revenue necessary to secure state government incentives.
Those investments include facility improvements and lower-priced tickets, a 105 percent money-back guarantee in case of heavy rain, and a Taylor Swift concert planned for Saturday on race weekend. Epstein declined to elaborate on the additional costs for this year’s racing weekend, but chalked many of the improvements – a more reliable shuttle schedule, for example — up to better organization. Epstein said he hopes the concert will help families justify spending the full race weekend in Austin.
“This will give a real reason for families to come to town,” Epstein said.
He said he also hopes Swift’s concert will attract new fans to racing.
“When we put out the Grand Prix, we’re speaking to a crowd that is already familiar with the sport — it’s very hard for us to get new fans,” he said. “We’re investing in our future.”
Epstein said he hopes this year’s event will draw record crowds and rule out questions about the Grand Prix’s future in Austin.
“We think that this year’s event will restore the funding to a level we need,” he said. “If we’re wrong, it’s a bad miscalculation.”
Tickets for Formula 1 races will go on sale in April.
Disclosure: Bobby Epstein is a major donor to The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.
This article originally appeared in The Texas Tribune at http://www.texastribune.org/2016/03/09/formula-1-organizers-make-desperate-bid-state-fund/.