An economist provides figures to support Austin and F1
As the controversy continues to grow in the United States concerning the public funding provided to the Austin circuit, a renowned economist, Angelos Angelou, provides quantified measures of the impact a Formula 1 race can have on a local economy. The least that can be said is that the results are more than positive.
Thus, the economist contributes to the defenders of this project with a detailed article on Statesman.com.
To begin with, he believes that the $300 million in revenue generated by such an event is underestimated, as it does not include the economic impact of constructing the circuit itself. The construction currently employs 1,300 workers, which undeniably benefits the region’s economy. Additionally, a circuit requires staff to maintain it, which will lead to the creation of numerous permanent and temporary jobs during major events.
He also revisits the argument presented by Senator Dan Patrick when the Texas Senate refused to allocate $25 million in public aid to the organizers. He emphasizes that this sum, as significant as it may seem, would not be directly taken from the state budget but from a specific fund established by the state, the Major Events Trust Fund. This fund aims to assist various organizers in securing the necessary cash flow during the preliminary phase of the event. It has helped attract major events in the United States, such as the Super Bowl, the NCAA basketball championship final, and the NBA All-Star Game.
Nevertheless, this amount is largely offset by additional revenues in the form of taxes related to the sale of alcoholic beverages, hotel nights, car rentals, and other restaurant meals. According to his estimates, Angelos Angelou believes that revenues would reach nearly $30 million in taxes, which would exceed the expenses incurred by the State. Regarding alcohol sales, it is relatively amusing for a European to note a response article from former county judge, Bill Aleshire: the $250 in alcohol sales per visitor do not take into account the prison costs for those who will be caught with alcohol in their blood while driving…
Angelos Angelou also recalls a study published by the very reputable Financial Times in 2008, which stated that the $250 million invested by various governments around the world to host a Formula 1 race translated into $1.52 billion in revenue for the local economy. It is possible that the financial crisis may have reduced this impressive 533% return on investment per race. Nonetheless, even with a rate divided by five (still over 100%), few public investments can boast such a return on investment…
With the participation of RacingBusiness.fr
