Australian GP costs government $46m

Posted on

| Written by

This year’s Australian Grand Prix in Melbourne cost taxpayers in Victoria $46m (??29.4m).

Melbourne newspaper The Age claims attendance increased to 305,000 this year but revenue from the event fell as costs climbed.

Last year’s move to a later start time for the event, to better suit international television audiences, is thought to be responsible for some of the increased costs.

Melbourne is contracted to hold the Australian Grand Prix until 2015.

Read more: 2010 Australian Grand Prix

Author information

Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

Got a potential story, tip or enquiry? Find out more about RaceFans and contact us here.

55 comments on “Australian GP costs government $46m”

  1. Just turn back that time to what it was. It would be of advantage for the millions of people now watching in Asia, it would not matter that much in Europe (my guess, come one how many fans will actually watch early morning but not get up at the end of the night) and for the Americas it would not be that big a difference but i think a bit better.

    And F1 should really think about the future strategy for the sport.
    Yes, the teams should get a bigger share, the FIA should get some decent income that can be used to support racing worldwide, but please don’t forget to find a better model for these track operators so tracks like Melbourne or Spa don’t drop off the calendar.

    1. I actually prefer the crazy times. I can stay up all night, watch the race, and then sleep until the afternoon. Going to bed early and getting up early is harder for my body to do because it’s easier to break the sleep cycle by staying awake than trying to sleep early, when you’re not tired at all.

      It also would have been dead handy when I lived in Canada because it would have meant the race starting at 11pm on a Saturday night and I could go to bed after watching it! As the European races start at 8am usually it would be nice to have at least one time bracket friendly to North Americans, if F1 is to expand there; currently there’s only the Canadian and Brazilian Grand Prix to watch at a sensible time!

      1. I actually prefer the crazy times.

        By which I mean I’m agreeing with you, 3am start times and the like.

        1. Part of the fun I had with crazy times of races was planning my weekend in advance, the logistics of making sure I had coffee or beers and work arounds at work.

          1. In the UK, Australia is brilliant as a season starter because you get up at 6am on a Sunday which seems too early, but you stay awake because you are buzzing for the new season to begin!

      2. I lived in the States for a bit and the Fuji race was broadcasted live at 10 or 11 pm on Saturday night, Pacific time though. Moving it a couple of hours earlier would help attracting north american viewers without making such a change for europeans.

      3. I agree. Race times is probably one of the bigger hurdles to overcome in the US. I’m looking forward to the flyaways (after Singapore), which will be late night races for me here on the West Coast. Cocktails and car racing go well together!

        1. Agreed. The European race times can be difficult here in Canada, having to get up at 6 am… not easy, especially after a night of hard drinking or the like!

        2. yeah me to. No more up at 7am (central time here) to was quali and race.
          Australia I prefer the old time then instead the 5pm time it ran this year, means I don’t have to be up until 3am and give better Cocktail hour ;) Next year I understand Australia will not start at 5pm but go back to 3pm.

      4. Same here. I thought the change of time was a dumb idea from day one. And kind of insulting to F1 fans in an oblique way.

        Any sport requires a little sacrifice. And it’s a bitter sweet sacrifice to be bleary eyed the next day from a late race, or up at crazy hours anticipating a live event from the other side of the world.

      5. I believe every race should be held at the same local time, 2pm Sunday afternoon. It’s meant to be a global sport, why try and adjust the times to suit certain markets.

        In Australia all the European races start at 10pm local time Sunday night, meaning by the time the podium and press conference is done it can be about 1am Monday morning, we all manage to get up and go to work Monday morning. The Canadian race starts at like 2 or 3am Monday morning, and Brazil starts at about 5am. We get a couple of races a year that are at a “normal time”, Australia, Malaysia, China, Japan, and Korea if it goes ahead.

        Personally I’m quiet jealous of the European guys, most of the races on a Sunday afternoon, and a couple of races at 6am on a Sunday morning, sounds like a dream.

  2. I know the press here in Melbourne are going to have a field day over this but more than $46 million would have been pumped into Melbourne over that weekend.

    Im not joking when I say there wasn’t a spare bed in any hotel and I personally pumped $1500 into the local economy over 4 days. Along with that its very good marketing for Melbourne which has contributed to the city rivalling Sydney now as Austalias top city. The city was absolutely packed over that weekend.

    I think me alone over those 4 days kept the Melbourne CBD bar industry afloat.

    1. $1500! That’s just not good enough… haha.

      so true though, i spend lots when i’m there. there’s a kebab shop in south yarra that certainly profited due to my presence over the last 2 years…

    2. Just think 100,000 people on race day alone spend $100 in and around Melbourne : $10 Million!! … and thats being conservative.

      I can see Melbourne getting most of that $46 Million back in tourist revenue (and exposure) over the 4 day weekend.

  3. “please don’t forget to find a better model for these track operators so tracks like Melbourne or Spa don’t drop off the calendar.”

    Wise words, but I don’t think I’ll hold my breath while Bernie Ecclestone is around.

    I’m not very well versed in the world of high finance, commercial rights contracts, etc, so perhaps someone who is could explain some things for me: hypothetically speaking, would it be possible for FOTA to eventually own the commercial rights to F1?

    1. At a very high price – yes. Probably somewhere around the 5-10 billion dollar range.

      He operates in the best interests of CVC, who did finance to buy the rights and have a massive interest bill each year to cover. The best interests of CVC – profit maximisation.

    2. I’m not very well versed in the world of high finance, commercial rights contracts, etc, so perhaps someone who is could explain some things for me: hypothetically speaking, would it be possible for FOTA to eventually own the commercial rights to F1?

      While they could eventually own the commercial rights, the more challenging question is where they could physically find the time to do it. Remember, a team’s first priority is to race and that generally takes up most of their time. The truth of it is that you need an external body to amange things like the commercial rights, because otherwise the sport won’t grow. And given that the twelve teams can rarely agree on anything, I can’t see them being able to handle the rights package.

      1. In addition to what PM says, there are lessons from history too. The last time the commercial rights were more or less in the hands of the teams, a single enterprising team principal took the lead and negotiated the best deal for himself.

        You might know who he is. Short guy, lots of hair, one eye….

  4. Autosport giving both sides to the story.

    Personally, I favour the Events Ministers view on this…

    “The economic benefit to Victoria far outweighs the cost of staging the Formula 1 Grand Prix,” he was quoted as saying by the Age.

    “The race was seen by about 12.8 million people in Europe this year and the massive television exposure that the Melbourne Grand Prix receives has helped to build our world-wide reputation as a great place to visit and a great place to live.

    “This year’s Grand Prix attracted the biggest crowd in five years and a television audience of 4.6 million in Australia, and with Mark Webber in such good form we expect that next year’s Grand Prix will be even more exciting.”

    …however, I would, I’m a fan. Hamish’s view supports this also.

    It’s true of any sport, for example even the Mountain Bike World Cup in Fort William each year is the biggest annual revenue generator for the town.

    1. I hope the mountain bike race doesn’t cost them 46m.

    2. That quote is from the link in the article.

      1. Actually, the quote came from the Autosport link, I didn’t look at the article link at all.

        Anyway, where the quote was copied from is pretty irrelevant as it’ll be used across loads of articles, what is important is the content of the quote which I am referring to.

  5. Wow thats cheap compared to the billions it cost us to host the Fifa world cup in SA.

  6. SHHHH! We don’t want the Vics to know!

    I can confirm that the crowds over the four days were larger this year than last year, even with the rain on Sunday. The Melbourne race has always ran a loss every year – the ‘Save Albert Park’ people who erect that tent by the tram stop every year are quick to remind everyone of that – but the Victorian government argue that they make that back with the extra money that comes in from international and inter-state visitors. I don’t think there’ll be any issue with the Australian GP as long as the losses don’t get too astronomical, even the NSW government want to poach it off the Vics, people are that keen about the GP here.

    One more thing, Albert Park should ALWAYS host the opening round of the Championship, every year. I don’t care about money or logistics or whatever, it’s a far, far better event than Bahrain and knowing that we’ll be opening in the desert again next year is a total buzzkill.

    1. The way I see it, Bahrain can have the season opener. Let everyone iron out the kinks, see where they are and where everyone else is in relation to each other, and then once it’s over, let the real racing begin in Melbourne.

      1. I like your thinking PM! :-)

        1. There was just something fantastic about waking up at 4AM local time to watch the start of the season in AUS :)

          1. At least you have the Sunday to recover. Try doing 10 years at 12am – 2am Monday in NZ.

          2. Or try only being able to watch 2 or 3 races a year because your parents won’t let you get up at 12am-2pm because of school to watch the races.

            I only ever get to watch Australia, Suzuka and theres another one thats nice for us down in NZ but I can’t remember what one

  7. As an Aussie I may be biased when I say the track is brilliant, the atmosphere is superb and the location is one of the best in the world for a GP. But the poll Keith put up about which races should be dropped suggests that I’m not alone in thinking this.

    Unfortunately I believe the race won’t last much longer, It’s too easy for the sensationalist here press to turn the loss into a big story and they do it every year I might add. And I think that, rather than anything to do with the costs themselves, this will be the end of it.

    But I rather hope I’m wrong.
    Because in my opinion, it is one of the greater weekends on the calendar.

    1. Guys, maybe it’s worth noting that I’ve seen some other figures bandied about by Australian news outlets, for example, the Age is reporting it at $49m.

      1. That’ll be Australian dollars. The above is US dollars.

        1. Ahh, I see… thanks ^^

        2. The US dollar is trading at around 93c so the conversions won’t make a huge difference.

          1. Well if you’ve got a spare $3m lying around I’d be happy to take it off your hands :-)

      2. I also just read that Britain is receiving the pope at a casual sum of $31m for his little holiday, so (And I don’t mean to be offensive) I don’t think the Aus GP price tag is that bad anymore.

  8. This old chest nut again. It is just the nay sayers that keep bring this topic up. They don’t relize that the GP is the great form of advertising Melbourne gets.

  9. I am shocked that dispite having a greater audience they made loss! Bernie are you listing!!

    1. Yes He is; to port!

  10. maybe they’d save money by not having the jets flying over bursting the ear drums of everyone in Melbourne (whether they were attending the GP or not)

  11. I would recommend scrapping this race altogether and just hold another one at Spa each year instead.

  12. When are Bernie and CVC going to realize that the fees being charged to race organizers are unsustainable? While there may have been some indeterminable economic benefit in the form of sales taxes or value added taxes, and advertisement for Melbourne there is still the fact that the race itself lost $46 million. This large of a loss is a horrible representation to the locals that aren’t fans of Formula One that have to foot the bill year after year. This trend is not healthy for the long-term success of any Grand Prix.

  13. The Australian GP is one of three on the entire calendar that starts before 10PM on a Sunday. Please don’t get rid of it!

  14. I’m from Melbourne and the reason this appears in the local media at the moment is due to the upcoming state elections. It happens before every election here, nothing new. In the end both parties would more then likely keep the race unless, as said by someone above, the costs did spiral out of control.

    1. That’s very useful to know, thanks AG.

      1. They announce the profit/loss every year, and it’s been steadily increasing. I guess we’re waiting for the point where the taxpayers won’t take it any more. By comparison, we just opened a desalination plant (we’ve had a long drought) and it will cost us $200m/yr over 28 years, potentially to do nothing.

        1. I’m learning a lot about Australian politics today! Thanks James.

          1. Actually you’re learning a lot about Victorian politics. Those issues are both State issues.

            When Australia was Federated in 1901, the States agreed to give up powers to the Federal government in certain policy areas. Everything else is handled by the State governments.

            This is part of the reason you will often hear it said that Victoria poached the Grand Pix from South Australia. The Victorian government went into competition with the then Australian GP organisers to win the race from them.

  15. We always run at a loss – but I don’t think we’ll be giving the event away. The weekend is pure magic, one of the best tracks in the world (ok, so I’m a biased Melbournian) which always produces one of the standout races of 2010. Perhaps if they cut the event down to a no-frills kinda thing – get rid of the attractions, the food, the jets…just keep the cars!

    1. It’s all this extra that makes it what it is. From what I can tell. Australia has one of the best support paddocks on the clandar. I know from going last year that there was nearly always something happening on track, it was great.

      1. It took a while to get used to Australian race meetings. If you don’t have a new set of cars going onto the track as the last lot come off it’s considered time wasted. The AGP is too slow with the turnaround for normal Aussie punters..

  16. I wouldnt mind it if they cut out the jets & build some extra shade.

  17. James thats interesting your comment on australian politics

  18. I really hope they dont close the circuit down for the GP

  19. I got a little annoyed when Ecclestone forced the change in time for the Australian race. As an Australian I stay up late on SUNDAY NIGHT to watch all the European races, and get up ridiculously early to watch the races in North America on MONDAY MORNING. I think I deserve to be able to watch the race in my home country at the proper time.

Comments are closed.