Australian Grand Prix Future In Doubt?

January 23rd, 2011

Jenson Button is the two-time and defending winner of the Australian Grand Prix, which is held every year at Albert Park in Melbourne, Australia. (Steve Etherington Photo)

BLOOMINGTON, Minn. — It’s time to dump the Australian Grand Prix claims Melbourne’s Lord Mayor Robert Doyle, who forecasts that the cost of the event will approach 70 million taxpayer dollars by 2015.

Ted Baillieu, Premier of the state of Victoria, has also stated that the race might not continue unless costs are cut significantly. Even with some 300,000 fans attending over the four days last year, the race still cost taxpayers $49.2 million, which was more than twice the costs incurred in 2006.

While agreeing that the Formula One race has been a boon for Melbourne, Doyle, writing in the Herald Sun, predicted one of four things will happen when the contract ends in 2015. 1] Ecclestone will move the grand prix to another country; 2] Ecclestone will insist that any venue in Australia hold the race at night; 3] The event remains a twilight race at Albert Park, but this would require an upgrade of the park, costing up to $8 to 9 million and the increasing burden to tax payers; or 4] Doyle concluded: “I know of no city that has voluntarily walked away from a grand prix, but could Melbourne be the first?”

It costs $28 million each year to build up and tear down the Albert Park facility. Plus the country and organizers must bear the brunt of the costs of the airfreight on the nine jumbo jets that are required to fly the Formula One circus’s equipment around the world.

But Australian Grand Prix Corp. chairman Ron Walker told the Herald Sun that Victoria reaps in $180 million in economic benefits from the race that also showcases Melbourne to a huge worldwide audience.

“It’s future is a matter for the government but the Grand Prix Corporation board does its best to keep costs down every year,” he said.

The fact that Melbourne might lose the Australian Grand Prix highlights core problems that Formula One has to face. Should countries and tracks that have formed an intricate part of Formula One’s history be cast aside in search of the almighty dollar? Does the series continue to prostitute itself by only selling its races to the highest bidders? Should Formula One races be held in wealthy, but perhaps irrelevant, countries?

Had the Formula One Teams Ass’n formed its breakaway series, one of its policies was going to be to charge sanctioning fees far below those of Bernie Ecclestone’s FOM that start at $50 million with a 10

percent annual increase for some new venues. This would insure that countries in Europe, as well as places such as Australia and the United States, could afford a grand prix, and even make a profit, as well as not having to depend on tax payer dollars.

But Ecclestone’s business model made him a billionaire, and CVC, the majority rights holder of Formula One’s commercial rights, is interested in the bottom line of its ledgers. Things need to change to protect Formula One’s classic venues, including Melbourne, but sadly nothing is going to happen anytime soon.