The ultimate irony about the failed F1 race in New Jersey is that while Bernie Ecclestone is blaming it on a promoter who failed to deliver the money, and the reporting on the matter inevitably fails to tell the whole story, it is still his primary ambition to get F1 into the New York and Los Angeles metropolitan areas, and by extension to conquer at least a small part in the lucrative US sports market. This is huge but F1 has failed to get a deal in Long Beach and has now failed in New Jersey as well. Both were viable projects, but failed because of the attitudes involved.
It has been clear for decades that the F1 business model will not work in the US market because it is too greedy. It leaves nothing on the table for the promoter, except some direct economic impact for the region and more nebulous international exposure and the impact of F1 on the glamour of an area and thus a potential hike in real estate prices. Very few public bodies in the US can provide funding and the best that can be hoped for is loans, and so F1 has been forced to rely on those on ego trips such as the US Grand Prix at Indianapolis. The race in Austin is an anomaly in that the state of Texas did agree to have a rolling loan to allow F1 to generate money for the local economy. But someone is losing money on this deal and we must wonder where it will ultimately end.
Formula One cannot simply blame America for the failures. If there is one market that would generate more money for F1, it is the United States. F1 is ultimately a consumer business and it should be strongest in the world’s biggest consumer market, a country that will continue to enjoy such status for at least another 30 years, such is its current level of domination. The potential for F1 to earn money in the United States is huge, but F1 refuses to make any investment. The irony in New Jersey is that Bernie recognised this and loaned the New Jersey promoter money, hoping to make things happen. But it made no difference because the loan was not enough to get the race started and then, of course, he fell out with the promoter and so the whole thing ceased to be viable as the right to hold the event suddenly belonged to someone with whom Mr E did not want to do business with any longer. And so the dream that was attainable has been dashed.
The problem goes back to CVC Capital Partners. They exist to take, using their financial muscle to buy companies and then take as much out as possible while leaving them saleable. If F1 is to make it in the US, someone is going to have to look at the bigger picture and have the patience to nurture races, to invest in building an audience. Take out the race fees and F1 can work anywhere. If you stop and think about it, the United States is a bit like Ferrari in that F1 wants it, the difference is that Ferrari has been able to leverage that desire into cash. The United States has not.
That might happen if a US company owned the business. Let us hope that this happens soon…