Two of Formula One’s three races in North America are facing financial issues that are raising concern about their future.
Organizers of the U.S. Grand Prix won’t be reimbursed at least $20 million from the state of Texas for the 2018 race after missing a paperwork deadline set by law. And new questions lurk about the future of the Mexican Grand Prix after the country’s new president suggested the government may not spend on the race like it has the last four years.
Both races have been popular with drivers and fans, and enjoy key dates on the F1 calendar. Mercedes driver Lewis Hamilton clinched season championships in Texas in 2015 and in Mexico City in 2017 and 2018.
Officials in Formula One and at the Circuit of the Americas, host of the U.S. Grand Prix, did not immediately respond to requests for comment Wednesday.
Both races get huge government financial support.
The U.S. Grand Prix has reaped about $150 million since 2012 from Texas’ Major Events Reimbursement Program, which is controlled by Gov. Greg Abbott’s office. That money has been considered critical to paying F1’s annual rights fee to host the race. In 2015, track President Bobby Epstein said a $5 million reduction that year could have jeopardized the future of the race, but it has survived.
Officials at the Circuit of the Americas in Austin have known for months the 2018 money wasn’t coming. Track officials were informed in an Oct. 8 letter — 11 days before the U.S. Grand Prix — that race organizers would not get money from the fund because they had missed a state-mandated deadline to submit an anti-human trafficking plan 30 days before the event. That plan wasn’t submitted until Oct. 3 and a previous letter of temporary approval was rescinded.
Two months later, track President Bobby Epstein contributed $50,000 to Gov. Greg Abbott, who had just won re-election.
The state requires major events that apply to the fund to have anti-human trafficking plans in part to help combat spikes in prostitution. The missed deadline and lost money were first reported Wednesday by the Austin American-Statesman . Abbott’s office provided a copy of the letter to the AP.
Epstein didn’t immediately respond to messages seeking comment. Abbott spokesman John Wittman said the state had no choice but to withhold the money.
Any future damage to the U.S. Grand Prix is yet to be measured and could still be mitigated. Wittman said the state is already working with race organizers to plan for the 2019 race. Formula One has it on the calendar for Nov. 3 with no suggestion it could be wiped out. The F1 season starts March 17 at the Australian Grand Prix.
“The State of Texas and COTA have a productive partnership that has had a tremendous economic impact on the city of Austin and the state as a whole, and our office is already working with COTA on next year’s race,” Wittman said.
The 2019 Mexican Grand Prix will be the final race in a five-year contract, with the Mexican government providing about $213 million in the five years. Formula One returned to Mexico City after a 23-year absence and the race has drawn huge crowds each of the past four years and twice crowned Hamilton as champion.
But Mexico President Andres Manuel Lopez Obrador said this week that government financial support for the race could be reduced or vanish as money is directed to other projects, such as a 1,000-mile railway.
“If it does not imply money, I will endorse it. But I*m a little penny pincher in these cases. I don’t know how are the Formula 1 contracts, but if they are not signed already we can’t do it. In many cases they were paid by the tourism fund and now those funds are going to be used for the Maya train.”
Racing Point driver Sergio Perez, the only Mexican driver in F1, said he doesn’t want to lose a race that can showcase his country. This season’s Mexican Grand Prix is Oct. 27.
“It does not look good, but I wish we can have some good news later, I think it*s important for our country to keep it,” Perez told Motorsport , noting the massive crowds the last four years.
“There are a lot of countries that want to host a Grand Prix, and once you lose your spot it*s very hard to get it back. It cost us so much to get it, and if we lose it now it’s probably the end and we might have to wait 30 or 50 years to get it back. It would be a shame to lose it.”