Like any privately-owned property or asset, one would assume that the value of an F1 racetrack should be easy to quantify. However, an argument around the taxable income of a Texan F1 race circuit has thrown up all sorts of questions about how to value a given F1 track, and if their true value can ever really be quantified.

Build cost devaluation

We all know how much race tracks cost to build: a lot. A new race track in Wales is being built for a reported $500 million (£380 million). But a build amount is not a way of determining the actual value, which needs to take into account future income, length of F1 contracts and the fact that the actual construction itself devalues very, very quickly. The case of an Austin-based circuit known as the Circuit of the Americas, with the only F1 Paddock Club United States has to offer, has thrown up one such question. Having been built for between $350-$400 million, the owners now claim that the track is worth just $100 million and reducing its tax bill from around $7million down to $3 million. Money that could well serve the local community. The editor of Formula Money, a London-based independent financial monitor of the sport, claims that race tracks devalue by as much as 20 times the cost per build, which begs the question of why investors are so happy to invest in the first place?

Cost of hosting F1

A given racetrack may get an F1 contract for a number of years, but its future value can’t really be assessed without knowledge of whether F1 continues to use the track. And whilst the track itself makes significant profits when F1 is in town, they have to pay Bernie Ecclestone’s Formula 1 company a sizeable amount to host it. Money that could well serve the local community. The editor of Formula Money, a London-based independent financial monitor of the sport, claims that race tracks devalue by as much as 20 times the cost per build, which begs the question of why investors are so happy to invest in the first place

Whilst the Circuit of the Americas continues to dispute its tax bill with the Travis County Officials, it’s still set to host the F1 in October. Make your F1 visit to Austin truly memorable by booking your place at the Circuit of the Americas F1 Paddock Club United States. And whilst the track itself makes significant profits when F1 is in town, they have to pay Bernie Ecclestone’s Formula 1 company a sizeable amount to host it.

As you can see, the sensible question of ‘How much is a race track really worth?’ is not so easy to answer after all.