The future of the U.S. Grand Prix in Austin is in doubt after the state of Texas announced it would reduce the subsidy it pays to the Circuit of Americas by roughly 20%.
The race received a subsidy of $25 million a year from the Texas' Major Events Trust Fund in 2012, 2013 and 2014, but that figure is due to drop to $19.5 million this year.
The payment is based on the amount of economic activity the race generates for Texas, but in September control of the fund was transferred from state comptroller Susan Combs, who agreed the initial £25-million deal ahead of the first race, to Governor Greg Abbott's office. The Governor's office told the Austin American-Statesman that a new formula is now being used to decide the figure paid to the circuit and it has resulted in a $5.5 million cut in the subsidy.
The cut could prove devastating for race organisers, who also had to contend with heavy rain ahead of this year's race, resulting in a drop in attendance figures and concessions sales. Speaking to the Austin American-Statesman, circuit boss Bobby Epstein said: "To use a technical term, I think we're screwed."
The Circuit of the Americas appears to have been caught off guard by the drop in subsidy, which Epstein referred to as "a breach of trust".
"It hit us cold," he added. "No one could foresee this coming. The big question now is, 'Is the race coming back?'"
Dave Shaw, a spokesman for Circuit of the Americas, added: "An entire facility was constructed based on that deal. If the calculation is changed now, that's effectively changed the terms of the deal."
Bernie Ecclestone, who agreed the initial contract on the basis of the $25 million payment, is also sceptical the race will go ahead with the cut to the payment.
"If it's changed, it's going to be difficult to continue the race in Austin," Ecclestone said.
The race is currently four years into a ten-year contract, but will join a growing list of failed F1 races if it fails to meet Ecclestone's race-sanctioning fee next year. The news comes after Ecclestone talked about increasing the number of races in the U.S.A. at this year's grand prix.