Does America need F1?  Does F1 need America?  Given the current state of the US’s only F1 track, the struggling Circuit of the America’s (CotA), as reported by Motorsport.com last night, they seem to me to be good questions.

I believe America wants F1, but does it need it?  No.  Wants and needs are two different things.  I WANT an Aston Martin Vantage Volante, but I don’t need it.  In fact, having one would put upon me an un-needed and un-wanted financial burden.  This does relate, believe me.

The US has the largest, most diverse and most financially secure sports environment in the world.  Its an alphabet stew of the NFL, MLB, NBA, NHL and MLS.  Add NASCAR, IndyCar, NHRA and IMSA for the 4 wheeled world and WOW!  I haven’t even touched the so called amateur sports of the NCAA.  By contrast, Europe, South America, the Middle and Far East do not have as wide a range of popular, and profitable, sporting events as does the US.

F1 is an extremely expensive endeavor to host.  The cost to simply purchase the RIGHTS to host a race are phenomenal.  A couple of years ago, a report out of Australia stated that the 2010 Australian Grand Prix cost the Australian state of Victoria $31millionUS.  On top of that, there is an escalator clause increasing the fee 10% per year, meaning this years race will cost almost $40millionUS!  Much of that is covered by various parts of the local, regional and national governments.  The state of Texas pays the Formula One Management (FOM), through CotA, about that much for the US Grand Prix. It has become a political hot potatoe in Texas.  It is not very popular as the $27+ million the state pays out of a tourism trust fund far exceeds most anything else, combined, paid by the fund.  But there’s more.

The general agreements have FOM getting 100% of any on track advertising.  This is in addition to the total control of TV revenue from the rights they already control.  This allowed them to force the removal of the stars painted on the run-off area (representing the state of Texas) and the DeJoria Tunnel signs (as in Paul Mitchell Products/Paul DeJoria, a major contributor to the building of the track) off the tunnels among other issues, as both were considered unpaid advertising by FOM.

Consider this, no American sports league has this much control over their venue’s on-site advertising.  In fact, it’s this on-site advertising that supports the venue’s continued survival.  Ask Jerry Jones if he would  have built the Dallas Cowboys (you know, America’s Team) ATT Stadium if he COULDN’T get this advertising!  I would say not!

So what does CotA have to work with?  Attendance!  Believe me, if the Jacksonville Jaguars had to survive on attendance alone, they would have been done and gone YEARS ago!  According to Christian Sylt, in an April 2014 Forbes article, CotA had to raise their ticket prices this year 24% to $409, and even then this brings them only to the break-even point!  I can’t afford this.  Neither can most people.  So how do F1 races survive?

Many nations, particularly in the Middle and Far East, and Russia, pay $400+million for the races in the name of National pride.  The rest, barely make it.  CotA isn’t alone.  Both the German and Italian Grand Prix have had, or are having, serious financial issues due to what we westerners call government oversight and taxation issues.  CotA is having the same struggles too!

So, does the US need F1?  NO.  Like my Aston Martin Vantage Volante, an American F1 race is an in un-needed and un-wanted burden that we cannot politically, or financially, afford.  With the current FOM contract, it frankly does not make business sense.  There are other, better, opportunities provided by so many other sports where there will be more revenue.

Does F1 need the US?  Yes!  Given the above described sports environment, the potential financial opportunities and the market the F1 teams themselves cater to, F1 NEEDS to be here.  If given a more realistic contract, and CotA getting a larger percentage of on-track advertising, both FOM and CotA can make a lot of money.  Any way the ticket cost can be reduced, the attendance will rise significantly, again, benefitting both!

Does F1 want the US?  I think not!  The contract itself is one sided to the point of “take it or leave it”!  Bernie Ecclestone knows motorsports, ALL of it.  He knew/knows that NASCAR had a race planned for the same day, yet refused to make even that seemingly minor (to him) concession.  Why would someone spend $400+ for an F1 ticket when they could spend one quarter that amount for the NASCAR race and still have money for a beer.  That decision alone leads me to believe he was setting the US Grand Prix up for failure.

So there it is.  I believe that F1 needs the US but doesn’t want it.  The US, on the other hand wants an F1 race but realistically does not need it.  I’m thinking that unless something changes with FOM, in the next 2 to 3 years we’ll be traveling to Canada or Mexico to see F1.