Circuit of the Americas Development Updates

[turn1]

I went to the Gypsy Lounge watch party today. Great crowd and great race! Kevin and the FreeKevin34 people were their guests. They did not suggest a boycott of the race. They did suggest a show of support for Kevin by wearing his colors or other gear along with that of your favorite current rider.

Pics & video later.

[turn1]

Pics from the Gypsy Lounge Watch Party:

https://www.facebook.com/media/set/?set=a.625893177425231.1073741845.157330087614878&type=1

[turn1]

COTA offers up $59 Sunday-only MotoGP GA tickets: http://www.superbikeplanet.com/2013/Apr/130415a.htm

[turn1]

Originally Posted by turn1

COTA offers up $59 Sunday-only MotoGP GA tickets: http://www.superbikeplanet.com/2013/Apr/130415a.htm

...and some good deals here...MotoGP tickets selling well below face value on stubhub...or not selling, I should say.

http://www.stubhub.com/us-grand-prix-tickets/motogp-3-day-pass-4-19-2013-4158346/

[jngreenlee]

So was COTA a loosing investment overall? Who holds the most risk at this point? If the developers were crafty, they probably made their money from government concessions...

[hookem]

Originally Posted by jngreenlee

So was COTA a loosing investment overall? Who holds the most risk at this point? If the developers were crafty, they probably made their money from government concessions...

Yet to be seen, I think. They've had only one other race event this year, and that was Grand-Am. Attendance was disappointing, but not sure how much of that is attributable to the fact it was just Grand-Am.

MotoGP, we'll have to see. They offended a lot of folks by prohibiting Austin's local MotoGP champ from the premises, and there are "sales" on tickets now which probably indicate they haven't sold as many as they'd like. Besides the one-day passes Turn1 linked to, there is also still the Gatti's Pizza deal which includes 2 tickets and food and a parking pass for $99 (but on Saturday, not race day). The circuit is saying 100K total 3-day attendance, but how that will shake out day by day is unknown. Probably around 50-60K on race day, I'd guess.

One thing seems certain; without the METF funding, I don't think the CoTA business model works. For MotoGP, in particular -

Costs:
* Sanctioning Fee for the race = $7M (a guess, based on other venues worldwide)
* Event expenses = $1M (a wild guess, for personnel, security, etc)
* Promotion = ? (I have noticed commercials and more billboards/web ads for MotoGP vs. Grand Am)
* Music acts = ? (They have concerts lined up for the race weekend, but I doubt they are paying much for those)
Total: $8M

Revenue:
* Ticket Sales = 60K tickets sold * $100 (let's say mostly GA and discounted tickets, but with premium and grandstand factored in making it just slightly higher) = $6M
* METF Funding = 1.7M (not counting local contribution, which is a wash since COTA is fronting that)
* Merchandise/food = $1M (again a guess, but I think a little less than $20 per ticket holder average is probably right)
Total: $8.7M

So, without knowing a lot of the actual amounts... it seems like the difference between a slight profit or breaking even vs. losing money is the METF. And with Formula 1, the difference is much, much bigger. It loses a load of money without METF funding.

As for who holds the most risk: the folks who have financed the $400M construction costs. Probably investors in Prophet Capital, Red McCombs, John Paul Dejoria. The track could presumably pay that off with the high dollar/METF funded events and the profits (even at a small margin) that those events can bring in, but it could never pay back it's constructions costs on smaller events/track days alone.

[turn1]

Originally Posted by hookem

Yet to be seen, I think. They've had only one other race event this year, and that was Grand-Am. Attendance was disappointing, but not sure how much of that is attributable to the fact it was just Grand-Am.

MotoGP, we'll have to see. They offended a lot of folks by prohibiting Austin's local MotoGP champ from the premises, and there are "sales" on tickets now which probably indicate they haven't sold as many as they'd like. Besides the one-day passes Turn1 linked to, there is also still the Gatti's Pizza deal which includes 2 tickets and food and a parking pass for $99 (but on Saturday, not race day). The circuit is saying 100K total 3-day attendance, but how that will shake out day by day is unknown. Probably around 50-60K on race day, I'd guess.

One thing seems certain; without the METF funding, I don't think the CoTA business model works. For MotoGP, in particular -

Without the METF, it doesn't work for F1 either.

The disappointment of the announced Grand Am attendance of ~25K for the weekend (which seems inflated based on what I saw at the race) stemmed largely from COTA's gross exaggeration of attendance projections for the race in the first place. They had previously projected 300K for the Grand Am weekend. As the race neared, and they slowly started to admit reality, the projections decreased in size. It looked like there was hardly anyone out there to me, but the Grand Am guys I talked to were all happy. They said this was their biggest crowd outside Daytona in quite a while, so this wasn't really a disappointing crowd at all for a Grand Am race. It was just disappointing compared to the ridiculous numbers the track is projecting to strengthen their case for the METF.

Likewise, COTA projected early on (without basis) that MotoGP would pull 225K for the weekend. Then their own economic impact study lowered that to 161K. That's a much more realistic number, but still optimistic since the average for the last 5 years of U.S. Moto GP events has been about 135K for the weekend. Recently they lowered expectations again to 100K for the weekend, and then "approaching 100K" for the weekend.

They also projected 300K for V8 Supercars. Suffice it to say that even their flagship race weekends in Oz don't draw that kind of crowd over 3 days, but it's going to here? Seriously? LOL.

The METF & ETF moneys help pay sanctioning costs, but it won't do much for their construction costs or even debt service on the very high interest loans that kept construction going.

Like you describe, they have a tough row to hoe, and I think they're probably shitting their pants over slow MotoGP sales. This was supposed to be the real moneymaker for them.

[turn1]

COTA now blowing out MotoGP 3-day General Admission tickets for $49...down from $89.

https://oss.ticketmaster.com/aps/cota/EN/buy/details/13att

[turn1]

Wow...3-day ticket reduced to $49. 3 days of parking? $90.

[Novacek]

Originally Posted by turn1

They had previously projected 300K for the Grand Am weekend.

I don't believe that was the _real_ attendance projection. That's more than the weekend attendance for the grand prix. If they had _really_ projected that big of a draw, they would have asked for _another_ 25 or so million from the METF. From my understanding, they didn't even ask for anything from METF for the grand am.

[Novacek]

Originally Posted by Novacek

I don't believe that was the _real_ attendance projection. That's more than the weekend attendance for the grand prix. If they had _really_ projected that big of a draw, they would have asked for _another_ 25 or so million from the METF. From my understanding, they didn't even ask for anything from METF for the grand am.

Okay, I think I know what the scoop is. After some googling, someone on one of the racing boards mentioned that 300k is the number that was on the circuits mass gathering permit.
In which case, it means that weren't really projecting an attendance that high (if you really expect 300k, its stupid to request a permit for 300k, cause if you're off by just a little bit you're now in violation of the law).
I expect they just always put 300k on their permit requests (as the maximum physical occupancy of the circuit).

Just a lazy reporter, looking up those numbers and reporting them as actual news

[turn1]

Originally Posted by Novacek

Okay, I think I know what the scoop is. After some googling, someone on one of the racing boards mentioned that 300k is the number that was on the circuits mass gathering permit.
In which case, it means that weren't really projecting an attendance that high (if you really expect 300k, its stupid to request a permit for 300k, cause if you're off by just a little bit you're now in violation of the law).
I expect they just always put 300k on their permit requests (as the maximum physical occupancy of the circuit).

Just a lazy reporter, looking up those numbers and reporting them as actual news

Then why use the 225K MotoGP figure on the same application? They knew Grand Am was never going to pull anywhere near 50K, much less 300K, and they certainly had to know MotoGP was going to outdraw it. Even F1 didn't pull 300K.

Also, I believe Epstein & Co actually used those numbers as part of their absurd claim that the track would pull 1,000,000 in attendance every year.

http://www.kxan.com/dpp/news/local/austin/cota-to-draw-more-than-1m-fans-by-may

Circuit Chairman Bobby Epstein told a crowd at Sunday's grand opening that those events could help bring as many as one million people to the area annually.

The bold portion is esp ridiculous. For that to happen, they'd have to draw an additional 1M people above and beyond attendees from the area. That's insulting to any rational person's intelligence.

ETA: Here it is, presented as a "Fact" on their own website:

Fact: Approximately 800,000 to 1.2 million people are expected to attend events at Circuit of The Americas annually once the venue is fully operational with the average out-of-state visitor spending $1500 per day (average stay of 4.6 days).

http://www.circuitoftheamericas.com/economic-impact

[Novacek]

Originally Posted by turn1

Also, I believe Epstein & Co actually used those numbers as part of their absurd claim that the track would pull 1,000,000 in attendance every year.

http://www.kxan.com/dpp/news/local/austin/cota-to-draw-more-than-1m-fans-by-may

Umm, that's actually the story that I was referring to, that appears to have pulled numbers directly from the mass gathering permit applications. They even say those numbers came from "records", not statements from the circuit.
There is no _actual_ quote from Epstein in that article, so it's hard to say that his claim is based on those numbers.
Hard to put much stock in an article that claims April 19-21 is _four_ days.

Originally Posted by turn1

ETA: Here it is, presented as a "Fact" on their own website:



http://www.circuitoftheamericas.com/economic-impact

Once the venue is fully operational, there will be events basically every weekend (concerts and such). 1 million visits annually then work out to ~20,000 every weekend. Not nearly so absurd then.

[turn1]

Originally Posted by Novacek

Umm, that's actually the story that I was referring to, that appears to have pulled numbers directly from the mass gathering permit applications. They even say those numbers came from "records", not statements from the circuit.
There is no _actual_ quote from Epstein in that article, so it's hard to say that his claim is based on those numbers.
Hard to put much stock in an article that claims April 19-21 is _four_ days.


Once the venue is fully operational, there will be events basically every weekend (concerts and such). 1 million visits annually then work out to ~20,000 every weekend. Not nearly so absurd then.

Nice try, but no.

1,000,000 people annually from outside the area, when the majority of attendees are from the area? No.

They MIGHT pull 500,000 total to races if you count the whole weekend. That leaves another 500,000 to all other events. So are they also going to host 50 more events averaging 10,000 a pop?

Even if they did pull a million total, that's still not accounting for all the local attendees....and remember, when you say you're going to pull all those people from outside the area, that implies 1,000,000 actual people, not 1,000,000 in total attendance. COTA counts one person as 3 people if they buy a three-day pass, which is very deceiving, since they sell 3-day passes almost exclusively.

The race track and the amphitheater are fully functional. No excuses there.

[Novacek]

Originally Posted by turn1

Nice try, but no.

1,000,000 people annually from outside the area, when the majority of attendees are from the area? No.

Again, there wasn't any quote from Epstein in that article. The only official claim is the one you pointed to on the web page, which is .8 to 1.2 million _total_ (local and outside the area). The two are completely contradictory, unless you think they're claiming -200,000 local visitors?

Or maybe, just maybe, the lazy-ass reporter that couldn't even count days correctly was confused.

[turn1]

Originally Posted by Novacek

Again, there wasn't any quote from Epstein in that article. The only official claim is the one you pointed to on the web page, which is .8 to 1.2 million _total_ (local and outside the area). The two are completely contradictory, unless you think they're claiming -200,000 local visitors?

Or maybe, just maybe, the lazy-ass reporter that couldn't even count days correctly was confused.

Split hairs all you want, but the bottom line is COTA is making massive claims that any reasonable person knows will not be realized.

1M attendees from outside the area will not happen. 1M in total attendance including locals is not going to happen either....and COTA's own 800K-1.2M number just happens to align very nicely with the 1M reported in the article, right along with the report of Epstein telling the crowd they could draw 1M as well.

Coincidence? Yeah, sure. Austin news media outlets report anything COTA wants and get an earful from the attack dogs when they print something COTA doesn't like...and that's straight from friends at KXAN and other outlets.

BTW, since you want to discredit the news article for an inaccuracy (of which we don't know the origin...could easily be straight from COTA), then how can we take seriously COTA's website, which makes this claim?

NOTE: To date, State money has not been paid to the developers of Circuit of The Americas

[Novacek]

Originally Posted by turn1

Split hairs all you want, but the bottom line is COTA is making massive claims that any reasonable person knows will not be realized.

Come on. This is an intern piece. This is "go to the county courthouse, pull the public records, and write something about it". There's no attempt at actual journalism or critical analysis in that article.

No, "gee, 300,000 seems like a lot, especially since that's more than F1 which basically shut down the town. I wonder how it compares to previous grand-ams. Oh, it's 10 times as much as any other grand am. And as much as the entire 2009 series in total. I wonder if someone typoed an extra 0. I better talk to the circuit directly and get a quote".
http://www.grand-am.com/FanInfo/GRANDAM101/FastFacts.aspx

Originally Posted by turn1

BTW, since you want to discredit the news article for an inaccuracy (of which we don't know the origin...could easily be straight from COTA),

really, you don't think a serious news organization should take responsibility for the accuracy of basic math in its stories.

Originally Posted by turn1

then how can we take seriously COTA's website, which makes this claim? : NOTE: To date, State money has not been paid to the developers of Circuit of The Americas

Umm, because it's true. Money has gone to F1 directly as the sanctioning fee (Ecclestone). State money didn't go to build the track.

[hookem]

Originally Posted by Novacek

Umm, because it's true. Money has gone to F1 directly as the sanctioning fee (Ecclestone). State money didn't go to build the track.

I have always wondered, though -- where did that first-year sanctioning fee come from? Because the METF money hadn't been received yet, and obviously Bernie doesn't take IOUs. So someone had to front the money. I've always suspected it was a short-term loan by McCombs or something. In which case, how did he (or whomever) get paid back for that first year? I'm guessing some creative accounting is involved, but the money received from the METF for the first race (after the fact) must have somehow got back to the person who fronted that money. Or maybe just calling it a "reimbursement" works for the METF. Wonder if they had to submit the receipt?

But back to MotoGP -- that $49 deal is pretty darn good. You can't get 3 days of anything in Austin for that price. I guess the $59 "race day" special is off now, right?

[turn1]

Originally Posted by Novacek

Come on. This is an intern piece. This is "go to the county courthouse, pull the public records, and write something about it". There's no attempt at actual journalism or critical analysis in that article.

No, "gee, 300,000 seems like a lot, especially since that's more than F1 which basically shut down the town. I wonder how it compares to previous grand-ams. Oh, it's 10 times as much as any other grand am. And as much as the entire 2009 series in total. I wonder if someone typoed an extra 0. I better talk to the circuit directly and get a quote".
http://www.grand-am.com/FanInfo/GRANDAM101/FastFacts.aspx



really, you don't think a serious news organization should take responsibility for the accuracy of basic math in its stories.


Umm, because it's true. Money has gone to F1 directly as the sanctioning fee (Ecclestone). State money didn't go to build the track.

1. State money has gone to COTA/CELOC to pay for the sanctioning fee. Even if it went straight to F1, who do you think is responsible for the sanctioning fee? Who do you think that benefits the most? That's right, COTA. Even if it went straight to F1 without ever passing thrrough COTA's grasp, it doesn't matter, because they get the benefit.

2. The 300K for Grand Am isn't the only exaggerated number here. They're all exaggerated. Supercars will only pull a fraction of the 300K claimed. MotoGP will only pull a fraction of the 225K. F1 didn't pull 300K & didn't sell out, as Geoff Moore recently claimed, & it was the only estimate that was even close. Were those all typos too? No critical examination of the numbers? That's how COTA likes it.

3. How many different BS numbers have they claimed for the capacity of the amphitheater? There have been many, ranging from 8K to 22K. 8K sounds about pretty close, but their claim of 14K is ridiculous to anyone who's ever seen it up close.

4. Even the claimed Grand Am attendance was exaggerated. 25K? Nobody who was there and paying attention could actually believe that.

[turn1]

Originally Posted by hookem

I have always wondered, though -- where did that first-year sanctioning fee come from? Because the METF money hadn't been received yet, and obviously Bernie doesn't take IOUs. So someone had to front the money. I've always suspected it was a short-term loan by McCombs or something. In which case, how did he (or whomever) get paid back for that first year? I'm guessing some creative accounting is involved, but the money received from the METF for the first race (after the fact) must have somehow got back to the person who fronted that money. Or maybe just calling it a "reimbursement" works for the METF. Wonder if they had to submit the receipt?

But back to MotoGP -- that $49 deal is pretty darn good. You can't get 3 days of anything in Austin for that price. I guess the $59 "race day" special is off now, right?

Yes. Someone or a group of someones at COTA paid Bernie....and then they got paid back by the METF.

Re: the special...yeah, wouldn't you feel stupid if you paid $89 up front or $59 for the race-day special only to see 3-day tickets selling for even less just a couple of days later? Lots of people not too pleased about that.

They're doing anything they can to get their attendance up for the METF's benefit and because this is the race they actually thought was their biggest chance of making real money....but they've screwed that up, too, with the Schwantz fiasco.