The US Grand Prix in Austin is facing uncertainty following an announcement by the State of Texas that will be cutting payments to the Circuit of the Americas this year by more than 20 percent.
COTA has received significant funding from the State since 2012 - approximately $25 million - which is tied to the race's economic impact to the Texas region. This year's subsidy is expected to be reduced to $19 million.
Given that COTA's sustained business model was based on government payouts, which were contractually agreed by Texas, any reduction in spending may put the venue's future in jeopardy according to its chairman Bobby Epstein.
"To use a technical term, I think we're screwed," Epstein said. "It hit us cold. No one could foresee this coming."
"An entire facility was constructed based on that deal," COTA spokesman Dave Shaw added. "If the calculation changes now, that's effectively changed the terms of the deal."
State officials said the funding cutback was justified by a different method by which the economic impact of the event was calculated. It remains to be seen if COTA will dispute the decision and engage in a legal battle with Texas
The latest news only adds insult to injury for the US GP which is expected to suffer a massive financial loss this year as appalling weather over the race weekend led to very poor attendance figures.
Speaking about the importance of Formula 1 in America, Bernie Ecclestone recently expressed his desire to add several more US races to the calendar in the longer term. COTA's sudden financial woes aren't exactly the best incentive for US promoters to get involved.
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