04/08/2010
NEWS STORY
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Tavo Hellmund, promoter of the US Grand Prix, looks a little like Jim Carrey and he shares the Canadian actor's rapid-fire manner of speaking. On this seemingly unlikely head and shoulders rests nothing less than the hope of interest in F1 from an entire nation.
In the weeks since the announcement that Full Throttle Productions, the company which Hellmund founded, will be promoting the US GP, Pitpass' business editor Chris Sylt has had numerous emails, phone calls and a meeting with him arranged by F1 boss Bernie Ecclestone. Drawing on this contact Sylt explains here why he believes that Hellmund is just the man that Uncle Sam needs.
Soon after Ecclestone's business, Formula One Management (FOM), announced that Full Throttle had been awarded a ten-year contract to host the US Grand Prix in the city of Austin in Texas from 2012 the criticism started to flood in. In the past five years F1 has moved into four new countries and although reception was mixed on the announcement that they would be added to the calendar, few attracted scepticism of the race ever taking place. That all changed last year when Donington Ventures Leisure (DVL) revealed that it would not be able to honour its contract to host the British GP from 2010 due to a lack of funds.
Like DVL, Full Throttle has never before promoted an F1 race, at the outset its backers were also unclear and whereas DVL only needed to make modifications to the circuit, Full Throttle had yet to begin construction of the track in Austin. However, in just a few weeks Hellmund began to show that any comparisons with DVL were on paper only. He has announced the location of the circuit, named his key backers and even revealed that he has $25m of state support - something which Silverstone has failed to pull off despite its 60 years of history. However, perhaps Hellmund's strongest asset is his heritage within F1 itself.
Tavo Hellmund is not a name which many people were familiar with prior to him being revealed as the US GP promoter. However, one person knew him very, very well and he is the man who matters.
Ecclestone says with a rare smile that he has known Hellmund "since before he was born." It is almost not an exaggeration since his father, Gustavo Hellmund-Rosas, was president of Mexico's Grand Prix organising committee when the race was held in the late 1980s.
Hellmund junior was inducted into the world of motorsport at an early age when he became a gopher at Ecclestone's Brabham F1 team. "I did that so I had an inside track on how F1 worked and what Bernie was doing back then to grow it into what it is today," says Hellmund adding "I have known Bernie for almost 40 years." It didn't take long for this to pay off in his career.
Whilst working his way up racing's ranks Hellmund followed in his father's footsteps and began promoting events. In the early 1990s the untimely death of one of his friends at the hands of a drunk driver led Hellmund to found a campaign called 'safe and sober' which involved motor racing drivers attending schools to educate pupils about wearing a seat belt and not drinking and driving. "A kid who is 17 years old doesn't listen to their teacher or unfortunately even a mother whose kid has been killed but they will listen to someone who they think is cool," says Hellmund.
With the support of General Motors the campaign became so successful that Hellmund "ended up doing 350 presentations at 400 high schools in the south west of the US." It grew into a year-round after-school programme called Racing For Education which Hellmund says was "about educating why it is important to stay in school, to not drink and drive and to not to be in a gang. We did that state wide and that was a really successful programme." So successful indeed that Hellmund was commended by the then-US president Bush for it.
One thing led to another and he says he was soon hosting large-scale events from "concerts with attendance of 60,000 or 70,000 people to hot air balloon festivals." In 2004 Full Throttle branched into its first race by promoting the 'Texas Racefest'. This was a sell-out due to it being the only event combining a Grand National NASCAR race with a meeting from the USAC Midget Car series which has spawned such renowned drivers as Mario Andretti, Jeff Gordon and Tony Stewart. "Six years later we are still doing those and in addition we did the Mexico USA soccer friendly in Houston six or seven years ago," says Hellmund.
F1 was out of his reach as the sport was in the middle of a turbulent eight years racing at Indianapolis. Two years after the 2005 US Grand Prix when only six cars raced due to risk of tyre failure, Indianapolis finally severed its ties with F1 and this was the catalyst for Hellmund's bid.
"We started talking hard about Austin about two weeks after they publicly announced that they weren't going back to Indianapolis," says Hellmund. Over the past five years F1's viewing figures have surged to 520m and brought the sport under the radar of emerging nations such as Abu Dhabi, Singapore and South Korea. Their governments are prepared to foot F1's hosting fees to use the exposure through the sport to drive tourism and this has fuelled a bidding war which has sent the average race hosting fee soaring to $31.2m. Indianapolis was not prepared to pay this and it gave Hellmund a foot in the door.
Hellmund has a very good idea of why Indianapolis was not right for F1 and, perhaps surprisingly, it doesn't come down to the forces of the high-speed oval on Michelin tyres. "Just like you wouldn't try to run NASCAR at Monte Carlo," says Hellmund "how do you ever compete with an institution that has got a 100-year head start?" He makes the point that at most of the circuits visited by F1, the series dominates (indeed, the promotion contracts demanded this until the European Commission put a stop to it in 2001). However, this could never be the case at Indianapolis.
Hellmund adds that the facility itself is crucial to F1's success. "The folks at Indianapolis have been limited in that they have got a permanent structure that you can only modify so much," he says adding that "when you look at the history of Grand Prix racing in America, all the way back to the one year they were at Sebring in the 1950s, the only time they were at a permanent facility was at Watkins Glen. True long-term traction was from 1960 to 1980 at Watkins Glen." Hellmund points out that even New York doesn't have the space to build this kind of F1-dedicated track but of course Texas does and this was crucial for Ecclestone.
"Full Throttle are the only people we found in America who are going to build a world-class circuit," says Ecclestone. However, it took much more than this to get the green light.
Hellmund says that he "had to convince Bernie that Austin was the right place because he viewed it 25 years ago as a town." It has changed a lot since then. Austin is nicknamed Silicon Hills due to its status as the second most important technological centre in the US behind Silicon Valley. This makes it particularly appealing for F1 and in the vicinity of the city are the headquarters of multiple team sponsors including AMD, Dell and HP.
With Houston and Dallas under 200 miles away Austin has a catchment area of 22m people yet still has an unemployment rate of 6.9%, the fourth-lowest among US cities with populations of one million or more. It also has hundreds of bars and music venues for the twenty-something set which should comprise the bulk of F1's fans.
The geographic location is the big pull though. Starting with a blank canvass Hellmund says that "an ideal location is central from both coasts, the closer to Mexico the better because then you start becoming the Grand Prix of the Americas instead of just the United States Grand Prix."
Andrew Craig, the former chief executive of Champ Car, adds that "Austin is in the unusual position of being one of the few major cities in the US that is not home to a franchise for any of the major sports properties. So a US GP would have reduced competition for attention and high appeal to residents starved of live sports events in the host city."
Speaking from experience Craig says that "the Texaco supported Champ Car race in Houston, which ran through 2007, was successful in attracting high levels of corporate support and boasted full grandstands and the Indy Racing League oval race in Fort Worth is one of that series most successful events. With the right promotion and with a date at the right time of year (avoid August!), Austin is a venue that could work for F1."
On a more micro level, downtown Austin and the international airport are within 10 miles of the circuit which is south-east of the city. Despite the 900 acre plot being under his control for the past four months Hellmund deliberately delayed announcing its location and didn't buy the land directly to maintain secrecy. The reason for this is that he was looking at buying further plots on the perimeter and once the location became public it added a premium to it.
Circuit designer Hermann Tilke has confirmed that the track will be ready on time and Hellmund adds that "the specialists and the general contractor are telling me this is a fancy driveway with some buildings. I had never really thought of it that way but that is what everyone is saying." If anything, Hellmund may be too honest for F1 with his fresh and frank approach shared by very few other race promoters. Fortunately, he knows precisely how to give fans a good show. Hellmund isn't just a former driver but is also a fan himself.
"I have bought tickets for the Indianapolis 500 since 1986 and even when I don't go I give the tickets to someone as a gift. The same with Daytona. That's what I think being a supporter means," says Hellmund.
Putting this into practice he says that the Austin circuit will be "focussed on fan amenities meaning access and the fact that their seat should be able to see more than one corner. There will also be elevation changes along the circuit and it will be more than three miles long." Circuit diagrams and artwork have yet to be revealed but Hellmund says that "we need to build something that goes with the local architecture so it is similar to the architecture of the University of Texas' campus."
He adds "one of the things we have done is we have taken four or five corners we are fond of from other circuits and used them as a pattern for certain sections of our track. There is a corner from Turkey, a couple from Silverstone and one from Hockenheim." Given such attention to detail it may seem surprising that Hellmund is using the much-criticised Tilke to do the circuit design work. However, all may not be what it seems.
"Don't think I haven't been fully aware of all the criticism of Tilke and cookie cutter race tracks," says Hellmund adding "to be perfectly honest, with Tilke we had to dig in on a couple of ideas and fortunately Hermann has spent enough time working with us that he knows we don't give in very easily and we remind him that we are the client, not the other way around." It sounds very professional and promising. The state of Texas certainly thinks so too.
Ecclestone says that the biggest difference between Donington and Austin is that "the government is supporting the race." However it took some doing.
In 2004 the government in Texas passed a bill to make available a fund to attract to the state major events, such as the Superbowl, World Cup and Olympics. Hellmund noticed that although it wasn't on the state's list, F1 was the only global motorsport which would fit into this category. He says that he met with his local senator two and a half years ago and applied for F1 to be included. He got what he wanted and the state has made available up to $25m for every year of Hellmund's contract.
Hellmund stresses that the state money comes from "increased sales tax revenue generated by the event. Not only is it motel and hotel, it's retail, rental, alcohol and everything." He adds that unlike bids for events like the Olympics and World Cup, he has privately financed his F1 bid. "The government should look like geniuses because they didn't spend a penny in three years of bidding for the F1 rights, and they are not going to spend a penny on building the circuit," he says.
Ecclestone adds that "the government won't lose their money," and this is supported by research. An average of 160,000 spectators visit each Grand Prix and, according to F1's industry monitor Formula Money, this gives governments a 710% return on their investments in the races.
The state's $25m will cover the fee which Full Throttle pays to FOM in the first year but it will soon fall short. Written into F1 race hosting contracts is a clause which increases the amount paid by 10% annually. By the tenth year of its F1 contract it is expected that Full Throttle will be paying around $59m which would leave a shortfall of $34m after the Texas state has paid its contribution. Then comes building the venue and Hellmund says "the ballpark for the circuit construction is not much less than $250m." Accordingly, it is no surprise that FOM wanted to see the colour of Hellmund's money and he adds that "they don't care whether it comes from your crazy aunt or a government."
As was recently revealed, Hellmund's financiers include Texan billionaire Red McCombs, who co-founded outdoor advertising company Clear Channel. In addition, the US GP is backed by Prophet Capital Management, an Austin based private investment company founded in 1995, and another Texan, the former motorcycle world champion Kevin Schwantz. McCombs' car dealership supported Hellmund's racing career and Hellmund says that his backers are "either people I have known over the last 10 years or further back."
As Pitpass recently revealed, to re-ignite interest in F1 in the US Mr McCombs is ensuring that Clear Channel will help with promotion and there may be more local support to come as Craig says that "corporations in the Lone Star State tend to get behind big events, particularly something as prestigious as an F1 Grand Prix."
Hellmund nonetheless has an uphill climb ahead of him. He still has critics such as Zak Brown, chief executive of Just Marketing, the company which represents F1 sponsors including LG and Johnnie Walker. "I think the timetable is the biggest question as opposed to whether it's going to happen," says Brown. Likewise, there remains the big question of how to re-ignite interest in F1 in the US. One neat way would be to flood the local colleges with the F1 In Schools programme but, according to the project's boss Andrew Denford, Ecclestone says that it is too early for this.
Hellmund says he has a "long and detailed plan" to get the US audience reacquainted with F1. "One of the things we are going to do is have Grand Prix parties starting early next year in parks with big screens, music and a show car programme across the United States." He adds that "we have already talked with a couple of the teams about engaging the audience." Some things will be harder for him to change.
"I think a slight time delay could help a lot with the US television audience," he says adding that the broadcasters need to do more to teach the viewers about the sport. "Everyone as a group agrees we need to encourage there being a 15 minute educational piece prior to each Grand Prix instead of it starting minutes before the lights go green."
However, the biggest risk to success in the US is still F1 imploding. "If they build a good circuit and there's no politics they will win fans in a heartbeat," says former world champion Nigel Mansell adding "the racing fans of America embrace great racing." If Hellmund can achieve this then he will win the grandest prize of all.