As the Austin forecast calls for more 100 degree days, Governor Rick Perry and his wife Anita left this morning for eight days in Italy, where money and motorsports are in the wind.
On the agenda are various economic development meetings, a speaking engagement at Lake Como, and Sunday's Formula 1 Italian Grand Prix, in Milan.
With Austin's United States Grand Prixonly a few weeks away, the Perrys will be watching a sport that's followed, often obsessively, around the world, but that has had about as much traction in the United States as professional soccer. (see Esquire: "Will America Ever Catch The Formula 1 Bug?") The United States has hosted 41 Formula 1 races in the past, at seven different locations, but the sport has not gained ground on American motorsports like NASCAR and IndyCar racing.
Globally, Formula 1 sits atop the pyramid of sports, and sports money.
Formula 1 racing teams spend hundreds of millions of dollars each annually, developing race-worthy cars and flying them around the world with their hundreds of support team members.
On top of this heap is Bernie Ecclestone, an English billionaire who runs and partially owns Formula 1. A former car salesman and race driver, Ecclestone bought into an F1 team in 1970 and proceeded to build a racing empire.
Part of the pitch to venues like Austin is that the wealthy traveling party will bring economic benefits to the city. The initial pitch letter for the Austin race suggested it could bring $300 million and 1,200 jobs, each race year.
But what will the actual costs and benefits be, and how will they be measured? Texas will likely contribute $25-million toward toward the event from a major event trust fund. Travis County has costs relating to infrastructure upgrades, and foregone revenue from granting an agricultural property tax exemption to half of the racetrack's acreage. Extra revenue will come from sales, airport, and hotel taxes.
As the Governor meets with European business and economic leaders (see The Texas Tribune's analysis of his trip: "Perry Going to Italy for F1 Race, Economic Forum" ) including the chairman of Formula 1's Ferrari racing team, perhaps he'll bring back some insights on the true benefits and costs of Formula 1.
