The future of the Australian Grand Prix at Melbourne

Bernie Ecclestone, Indianapolis, 2007 | GEPA / Franz PammerBernie Ecclestone has been quoted in an Australian newspaper casting doubt on the future of the race:

Maybe we don’t want to be in Australia. Our costs are very high in Australia and we get a lot less money. It’s bloody bad for us. We’ve got quite a few places on the list that would like to have Formula One and, as it seems your guy down there [John Brumby, Premier of Victoria] doesn’t want Formula One, we can make him happy and make the other people happy.

Is this a serious threat, an attempt to squeeze more money out of the race organisers, or something else?

From Adelaide to Melbourne

The Australian Grand Prix was first held as an F1 championship race on the Adelaide street circuit in 1985. It proved a popular end-of season event despite two horrendously wet races in 1989 and 1991.

However Ecclestone has never been one to stick with a working deal if a more lucrative offer comes along. In September 1993 he was approached by Ron Walker, then treasurer and fund-raiser for Australia’s Liberal Party, who had the support of then Victorian Premier Jeff Kennett. Walker and Ecclestone struck a ten-year deal believed to be worth AUS$15m per year – 66% more than Ecclestone was getting out of Adelaide.

The contract has since been extended to 2010. Most events on the F1 calendar have contracts extending beyond that date, the chief exceptions being the British and French rounds, the future of which have also been threatened by Ecclestone in recent years.

Money problems

Last year crowds for the weekend dipped to 301,000, their lowest since 1998 – although at least one blogger claims the event is poorly marketed, which raises the question whether the current organisers have fallen out of love with it. This year’s race will feature a concert from rock group Kiss – are they a good match for F1’s audience demographic?

This is a problem for the race organisers because the race is already a money-loser.

The Australian Grand Prix has had title sponsors – it was previously backed by Fosters and as of last year Renault sponsors ING took over. But according to Victorian Government Premier John Brumby (who inherited the race from Kennett) the race has never turned a profit, losing ??15.5m last year.

It also attracted substantial vocal opposition from local environmental groups, unhappy with the race being held in a park, and critics of the secrecy with which the original deal was arranged by Kennett and Walker.

Under cover of darkness

With the event already a poor return on investment for the organisers, Ecclestone’s second demand might be even harder to meet:

In Melbourne, if we were to continue to be there, we would have to have a night race. That would be the only option.

The Singapore Grand Prix will be the first F1 race under floodlights later this year, and the Malaysian Grand Prix is expected to follow in 2009. It’s doubtful that the environmental protectors that originally objected to the race will welcome the installation of huge numbers of energy-sucking floodlights, making the decision to go along with the scheme even harder for the government.

But perhaps the organisers can take some cheer from Ecclestone apparently ruling out other venues for the Australian Grand Prix. Four other locations have been suggested in the last twelve months, including Philip Island (home of the Moto GP race), Flemington race course and new constructions in Geelong and Queensland.

But as American fans know Bernie Ecclestone isn’t big on compromises. He names his price, he makes his demands, he might have a token whinge in the local press, and if you don’t get it sorted someone else will have your place on the calendar.

Photo copyright: GEPA / Red Bull

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17 comments on The future of the Australian Grand Prix at Melbourne

  1. Nathan Jones said on 3rd February 2008, 8:31

    i can tell u right now the race is VERY poorly marketed!
    it’s only 40days till the race and only today did i see an add on tv for it!
    all this country cares about is the AFL, even tho it’s cricket season here (i live in melb, 45mins drive from the track) all we hear is what the AFL teams are doing!
    races outseide here are never advertised for telecast times and are barely mentioned on the news!
    the only time it';s in the papers here is 2 weeks b4 the race till the mon after and that is it for f1 for the whole year!
    motogp is even worse, tho when stoner won the title it’s all we heard for a week, even tho during the year it was never mentioned that he was winning!

  2. We can’t lose the Australian Grand Prix, the season wouldn’t be the same without the opening race at Albert Park. I know many people who feel the same way as me, but unfortunately Bernie has a track record of not listening to the fans when it comes to decisions like this. He could just be playing one-up with Australia to squeeze more money out of them though.

  3. now, is this just another of slight pushes from Bernie (like the “worn down” facilities in Sepang” remark last year) or a genuine displeasure with the way the things are going with F1 down under.

    few years back I was in Melbourne few weeks before the race. the only sign of F1 race happening soon were the preparation works in Albert Park and some posters pasted on the trees around the lake with F1 hating messages. No sign of any promotion …

  4. Robert McKay said on 3rd February 2008, 11:40

    Presumably, by Ecclestone’s logic, any other Australian GP venue would have to run a floodlit Grand Prix. Unless this is a stick with which to beat more money out of the organisers, a bit like continually laying into Silverstone’s facilities. I suspect meither of these things really, truly matters that much to Bernie, he’s just looking for an excuse to go to some other Asian race funded entirely by it’s Government.

  5. theRoswellite said on 3rd February 2008, 20:03

    An even bigger question than the health of the A-GP, is the overall direction of the entire process. As long as Mr. Eccelstone, our primum movens, has as his “bottom line” a business model for the attribution of Grand Prix races, we all e.g.,the US, Spa, France, even Great Britain, are powerless to address other concerns, such as historic precedence, national popular support, or even the relative economic health of differing countries.

    It would seem equitable to have the FIA as a “significant other” when it comes to making these long term decisions about the future of the series, and that they would, hopefully, speak for those who have no vote in this process….the fans.

  6. Pink Peril said on 3rd February 2008, 22:48

    As much as I want to keep the GP at Albert Park, I do take umbrage at ‘requests’ for a night race to cater to European TV audiences.

    I stay up until 2am (sometimes later) watching the Euro rounds live on TV here. The only race that is not shown in the wee hours is the Australian one – which of course I am at & therefore have no need to watch on TV. Surely dedicated European F1 fans can put themselves out for one round a year?

    The Albert park GP is on it’s last legs I fear – it gets more opposition every year it seems. Last thing we need is Bernie making unreasonable demands that will ensure we lose it. And once it’s gone I don’t think we’ll every get it back.

    On another note, they have started building the track already (I can see it from my office). How many more sleeps to go? *excited*

  7. Nathan Jones said on 4th February 2008, 6:21

    exactly milos! there’s bugger all promotion of it!
    did some1 say the FIA would check with the fans about a decision? now come on…………
    our GP in melb is one of the favs of the teams and is run very well with support races etc!
    it’s just that good old motorsport always come after everything in oz!

  8. Scootin159 said on 4th February 2008, 16:46

    I’m not to fond of this whole notion that all races need to be held at a convenient time for the European audiences. I can understand that most viewers just happen to be in Europe… but isn’t F1’s whole goal to be a ‘World Championship’? Seems to me they’re on the right track by limiting each nation to one GP… but they’re undoing much of this gain by holding races at times inconvenient for the locals.

    If you ask me F1’s biggest ‘hindrance’ in the US is:
    1) Lack of promotion (your average person will ask me what this “F1″ thing “is” when I mention it to them)
    2) #1 caused by races only being shown at 2-4am
    3) #1 not being helped by only being shown on “SpeedTV”, a channel most people in the US don’t even know exists.

    The USGP used to be an exception to this (local time, major network, ‘some’ marketing), although it was still hindered by the ‘major network’ not allowing any pre-race coverage… a necessity to any ‘new’ sport… but we’re not even getting that this year.

    How do the Olympics handle this? Is everything just tape delayed?

  9. Scootin, it’s good to see some discussion of F1 in the US!! Although i’m new to following the sport, it seems as though all of your points are absolutley correct. It semeed to me that Hamilton’s win at Indy this season gave F1 a big boost in getting coverage in mainstream American sports media outlets- something the sport needs in this market. Still, back to your discussion of timing…

    I’m not sure if you live in the US, but here on the east coast, i’m looking forward to the lights going out at Albert Park at 11 PM local time- a nice late-night show to kick off the season. It may not be easy-viewing in Europe, but it treats the fans at the track well, and gives those of us in North America a nice show. Evening sporting events are always nice (most of all in hot weather) but the first priority should always be the fans paying to attend- let them have the race at a convient hour for them if they shell out the money to be there.

    Here’s wishing the best to all of you F1 fans down under- i’m looking forward to seeing the race on TV and certainly hope you keep your event well into the future.

  10. Chris Johnson said on 6th February 2008, 22:15

    I hope the Australia race stays, although I always liked Adelaide’s track better than Melbourne. As far as worldwide distribution, Australia should have a race on it’s continent to make it a true “world” championship. North America now only has one race, same for South America. “Far east” Asia has 4, “near east” Asia has 2, and Europe 9. I’ll be worrying about Canada losing it’s place soon, to be replaced by Russia, Korea, India or a Middle Eastern country.

  11. Daniel said on 7th February 2008, 0:23

    If Formula 1 keeps running away from tobacco restrictions and enviromental issues, soon we’ll have plenty of races at countries with the lowest racing heritage imaginable… Argentina, South Africa, United States, Austria and New Zealand all have had world championship-winning drivers, not to mention Finland, with three of them, including the defending champion, and none of them have a Grand Prix in the calendar (Finland never had one…) Besides that, Mexico and Colombia have had Grand Prix winners, and also are out of consideration…

    On the other hand, drivers from Malaysia, Bahrain, Turkey, China, Japan, Singapore, India, Russia, South Korea or the United Arab Emirates have never won a single race (in fact, only Malaysia, India and Japan have been to the grid, and the best the japanese legions did was reaching the podium twice. At least they have had great constructors…)

    I’m not saying they should all be excluded, you know, but its a dangerous scenario… F1 costs are getting incredibly high, and the most interested in paying for them know are countries with large oil-fed wallets, reduced audiences, poor or none local racing formulae and very few or none top drivers…

  12. Keith Collantine (@keithcollantine) said on 8th February 2008, 9:18

    Australian Grand Prix boss Ron Walker got a grilling on an Australian radio programme about the race – here’s the transcript.

  13. pierre said on 10th February 2008, 16:08

    Daniel perhaps sums it up best. South Africa has an Illustrious F1 History dating back to the 1930’s although only hosting it’s first World Championship GP in 1962. SA hosted the event a further 23 times until it was permanantly removed from the F1 calender in 1993. We as F1 fanatics would do absolutely everything to host another race but Eccelstone’s standard operating standard make it totally impossible. Firstly the host is required to pay ridiculous amounts of money to secure he race, then spend Billion of $ building the circuit (and yes it must be a Herman Tilke design – the choice is not yours)and then he claims the right to Ticketing, television, advertising and leave the host with the engine smoke as so well put in another article refering to the Russian GP.o

    I believe that Aussie is to far South and Eccelstone is trying to keep the F1 Series in Europe and Malaysia.

  14. Bernie’s trying to keep it to whoever will pay him the most money…

  15. I wonder if Fi without backhanders/fees to little bernie – would then be profitable – allowing for set up costs – transportation of teams and vehicles,etc?? – any ideas on those costs?

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