Texas MotoGP 2013 Stalemate Continues

April 13, 2012
Bart Madson
By Bart Madson
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Bashing away at the MotoUSA keyboard for nine years now, Madson lends his scribbling and editorial input on everything from bike reviews to industry analysis and motorcycle racing reports.

Legal disputes continue to threaten the 2013 MotoGP race at the Circuit of the Americas (COTA). At issue are the acquisition of the MotoGP rights, and the multi-million dollar lawsuit of a former COTA partner against its principle investors. Caught in the middle is former Grand Prix champion Kevin Schwantz, whose dream of a Texas Grand Prix is fading into legal stalemate.
Proposed Circuit of the Americas in Austin  Texas. The plans to host MotoGP in 2013 have fallen into doubt during legal wranglings.
Kevin Schwantz says plan on buying tickets for next year, but the 2013 MotoGP race at Circuit of the Americas remains in legal stalemate.

The COTA project and 10-year deals with MotoGP and Formula 1 were announced in the spring of 2011. Since then the man credited as the driving force behind COTA and its Grand Prix deals, Tavo Hellmund, has been driven out of the venture. Problems surfaced in 2011 when Hellmund was deemed in breach of the Formula 1 contract. After rescheduling the planned F1 race to November of 2012, to make up for construction delays at the circuit, F1 boss Bernie Ecclestone renegotiated a new contract with a Hellmund-less COTA. Estranged from the COTA, Hellmund later filed suit against the circuit and its principle investors in March 2012 seeking compensation for his 20.58% stake as a founding partner (cited in the lawsuit at $18 million), as well as his promised $500,000 annual salary in a 10-year work agreement.

So while the renegotiated 2012 Formula 1 race is moving forward, the MotoGP race for 2013 remains in doubt. Public statements from the parties involved claim no F1-like renegotiation of the MotoGP deal is being pursued. But there is confusion as to where things stand. Dorna (the rights holder to MotoGP) has stated that the Texas GP is moving forward as planned, while COTA insists no 2013 contract is in place to race at the Austin circuit.

Dorna Communications Manager Ignacio Sagnier confirmed to MotoUSA via email that Dorna has an agreement with Schwantz’s company 3FourTexas as the rights holder of MotoGP racing in Texas and as promoter of the Texas Grand Prix. Sagnier went on to state that “as far as Dorna is concerned, there are no changes regarding the plans for Texas 2013.” 

But COTA has no active deal in place to host a 2013 MotoGP event. Instead COTA claims to be actively pursuing other two-wheeled series to replace MotoGP on its 2013 event schedule.

COTA CEO Steve Sexton clarified the track’s position in a phone interview with MotoUSA, stating: “We currently do not have a contract with MotoGP to conduct an event for 2013, or any year for that matter. We would love to host the series. We think there’s plenty of interest in the region for it. But if we don’t have an agreement, we have a variety of content series providers that currently are knocking on our door that we plan on announcing agreements with imminently for the 2013 schedule to fill the circuit.”

The main issue hindering the Texas GP is securing rights to the MotoGP race. Schwantz confirms he is the rights holder to MotoGP racing in Texas, per his agreement with Dorna. However, Schwantz and 3FourTexas have entered into an agreement with Hellmund’s Full Throttle Promotions. And while Hellmund’s status at COTA is mired in a multi-million dollar legal battle, his ownership of the MotoGP contract (via Full Throttle) is undisputed.

One point of contention between COTA and Schwantz is the circuit’s efforts to secure the MotoGP rights from Hellmund. The Austin Statesman reported that in February (just days before Hellmund’s lawsuit was filed) that Schwantz sent a letter to Sexton urging him to pursue acquisition of the rights from Hellmund before the 2013 MotoGP race is lost.

Asked to respond to that claim, Sexton stated: “There have actually been multiple efforts to try and secure those rights that have just not proven productive. So at this point we’re proceeding on with our efforts and our conversations, and our conclusion is actually to announce another series that will race here.”

Speaking with MotoUSA, Schwantz acknowledges that attempts have been made by COTA to resolve Hellmund’s disputed partnership (the focus of the lawsuit). However, he says no offers were tendered for the MotoGP rights separately. He also explains that having transferred the MotoGP contract to Full Throttle, he cannot pursue a deal, but instead COTA must negotiate for the rights directly with Hellmund.

“Up till right now they [COTA] have never asked Full Throttle for MotoGP,” said Schwantz via phone interview, adding. “They’ve made him some offers ownership-wise, but that’s got nothing to do with MotoGP.”

While mired in legal obstructions, there is hope for a resolution. One possible outcome is the transfer of MotoGP rights in a settlement of the Hellmund/COTA partnership lawsuit (The Statesman reported earlier this week that the case may go to arbitration). Yet Schwantz insists a serious attempt by COTA at securing the rights from Hellmund, independent of the pending lawsuit, could be successful.

“I think more than anything he [Hellmund] just wants the respect of getting a phone call and someone asking for it,” said Schwantz, who is a close friend of Hellmund’s. When asked what the dollar amount of acquiring the rights might be, Schwantz replied: “If it’s seven figures I’d be surprised, but I bet it’s considerably less than that.”

The overwhelming popularity of Schwantz, and his close relationship with Hellmund, might be the best hope that a MotoGP deal gets brokered. That and MotoGP’s importance to the COTA business model.

“I think Tavo realizes how important to the venue MotoGP is, and I’ve told him all along how important it is that I want this sport, that I gave so much to, to race in my back yard,” said Schwantz, who went on to point out that, “MotoGP is really beneficial in the amount of money it will bring, the amount of interest it will bring, so that I think it’s something from a business plan they [COTA] need to get on the schedule.”

While the courts will have to sort out the Hellmund/COTA split, the circuit remains keen on working with Schwantz. Sexton didn’t hesitate when asked about COTA’s willingness to do business with the 1993 500cc World Champion: “Oh certainly. This is kind of Kevin’s home base and he’s expressed an interest in having a riding school here. He’s got a great following, he’s a great guy. Certainly he has a substantial track record – we’d love to work with him. Right now we just have not had that opportunity. To the extent he would have an interest in it, the door is open.”

Again, Schwantz insists that legally he can’t initiate any deal. Hellmund’s control of the rights requires COTA reach out and secure them from Full Throttle. One thing both sides can agree upon is that a deal needs to get worked out sooner rather than later in order for the 2013 MotoGP race to take place.

“The door is not closed in any series, but we’re moving on,” says Sexton. “We have to move on and plan our schedule for 2013. We’d love to work with Kevin. Great history in the sport, great guy and happy to do it… But we have to run a business.”

Schwantz is optimistic a deal will get worked out in time. He notes that proposed dates for the Texas GP would not come until after the first two rounds of the 2013 schedule, so there are still at least 12 months remaining. There should also be no issues with the track getting ready in time, as it must be built for the Formula 1 race in November 2012.

“I don’t think we’re in any jeopardy of not having an event,” said Schwantz. “I just feel like we got to get some egos in check and everybody needs to realize what their position is, and the next thing you know it will all start happening.”

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