F1: Funding cut threatens Austin's F1 future

The future of the Formula 1 United States Grand Prix in Austin is in doubt after the Texas state government significantly cut its annual contribution to the Circuit of The Americas.

It is understood the state committed to providing a subsidy of $250 million over the course of 10 years, based on the economic impact of F1 to the region. Approximately $25 million was awarded after each of the 2012, '13 and '14 races, while it is believed the local government contributed around $4 million per year on top of that from sales tax receipts. However, sources say the annual payment will drop to between $18-19.5 million, after the state changed the formulas used for measuring economic impact.

Following an audit of how subsidies are calculated, the state concluded F1 is worth 20 percent less to Texas than previously believed and therefore cut the funding. It is understood the local government contribution will also be cut. This follows losses suffered by the circuit caused by severe wet weather during this year's fourth running of the grand prix, which had an impact on concession and ticket sales while there have also been requests for refunds.

The collective drop in income comes against a backdrop of a race-hosting sanction fee that was reportedly $25 million for the first race, before increasing by 10 percent cumulatively a year to around $33.3 million in 2015. The state payment comes from the Texas Event Trust Fund, an economic development program that pays selected organizers a portion of sales generated by spectators travelling from outside of the state.

F1 receives substantially more than other sports, largely because of the amount of fans it attracts from outside Texas. It received $25 million from the fund in 2014, compared to $1 million for the NASCAR Sprint Cup event in Fort Worth and $1.5 million for the ESPN X Games in Austin.

Originally on Autosport.com