Government funding cut threatens future of Formula 1 USGP at Austin

It is understood the state committed to providing a subsidy of $250million over the course of 10 years, based on the economic impact of F1 to the region.

Approximately $25million was awarded after each of the 2012, '13 and '14 races, while it is believed the local government contributed around $4million per year on top of that from sales tax receipts.

However, sources say the annual payment will drop to between $18-19.5million, after the state changed the formulas used for measuring economic impact.

Following an audit of how subsidies are calculated, the state concluded F1 is worth 20 per cent less to Texas than previously believed and therefore cut the funding.

It is understood the local government contribution will also be cut.

This follows losses suffered by the circuit caused by severe wet weather during this year's fourth running of the grand prix, which had an impact on concession and ticket sales while there have also been requests for refunds.

The collective drop in income comes against a backdrop of a race-hosting sanction fee that was reportedly $25million for the first race, before increasing by 10 per cent cumulatively a year to around $33.3million in 2015.

The state payment comes from the Texas Event Trust Fund, an economic development programme that pays selected organisers a portion of sales generated by spectators travelling from outside of the state.

F1 receives substantially more than other sports, largely because of the amount of fans it attracts from outside Texas.

It received $25million from the fund in 2014, compared to $1million for the NASCAR Sprint Cup event at Texas Motor Speedway in Fort Worth and $1.5million for the ESPN X Games in Austin.