The future of the Australian Grand Prix at Melbourne

Posted on | Author Keith Collantine

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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