Texas Cuts Funding for F1 Racing, But FIA Wants More Race in U.S.

Texas has been the host of FIA Formula One racing since 2012 in the Circuit of the Americas (COTA), located south of Austin. F1 Racing is one of the major tourist event for Texas, but that soon will change as the state of Texas plans to reduce its funding for the Formula One.

According to Forbes, every year the state of Texas pays $25 million to COTA to pay hosting fee for the F1 Grand Prix. FIA, as the governing body of Formula One Grand Prix is the sole owner of commercial rights to the series. Therefore a state support is crucial for COTA to host a race in the US.

However, Forbes reported that Texas governor decided to reduce its funding to $19.5 million according to a local newspaper the Austin American-Statesman, last month.

F1 races tend to have a thin margin for the hosts. It is because the hosts generally do not get revenue from television broadcast, corporate hospitality and advertising banners at the track. The revenue generated from the broadcaast and advertising goes to Formula One World Championship, the subsidiary of F1 Group. The only source of income for the hosts are only from the tickes sales.

Nevertheless, hosting one of the F1 series is a great exposure for a city or a country and a boost for tourism. This year's race in Texas attracted 101,667 spectators and around 1.5 million tourists visiting the state from outside North America. Even Mr. Abbot admitted the tremendous economic impact of F1 and COTA to generate hundreds of millions of dollar and supports thousands of jobs , as he said in a promotional supplement of this year US Grand Prix.

FIA also admitted that US race is appealing, as the Chief of FIA, Bernard Ecclestone wanted to have more venues in America. According to Reuters, Mr. Ecclestone told a German magazine, Auto Motor und Sport that California is his target, but it would be too soon for a race there.

When the reporter asked him about the future of US Grand Prix in Texas, Ecclestone said, "They knew exactly what it would cost when they signed the contract with us. They knew that they would have to build a race track and what it costs to put on a grand prix."

Bleacher Report reported that 2016 GP will also become a debut for the first American F1 team, Haas Team. American has also Alexander Rossi as one of the driver. However, F1 is not a popular American sport, as Alexander Rossi said, "I think the fanbase is growing," and he also added, "but I don't think it will become a household topic of discussion until not only is there an American driver or an American team, but until there is a successful American driver or American team."

American people may not care much about F1, but a worldwide exposure for the host will benefit the city and state hosting the race.