Crash.Net F1 News
Australia fears being 'priced out' of hosting F1
24 March 2011
The Australian Grand Prix could be killed off the F1 calendar once its existing contract expires in 2015, cautions Ron Walker, with the Grand Prix Corporation chairman pointing the finger of blame firmly at Bernie Ecclestone's 'wretched fee' that he claims could just 'break the camel's back'.
The future of the race has been a hot potato Down Under for several weeks, all prompted by Melbourne Lord Mayor Robert Doyle asserting in January that the event had cost Victoria state taxpayers too much money for too many years – and that it was consequently time to pull the plug on it [see separate story – click here
Since then, debate has raged on, with Ecclestone himself intervening – not uncharacteristically – on both sides of the argument, conceding in one breath that the Australian Grand Prix could easily be removed from the annual schedule and in another that the race is as important to F1 as is Monaco and that as such he 'would hate' to lose it.
With combined losses of some £156 million since the event switched from Adelaide to Melbourne 15 years ago, however, Walker contends that it is the licence fee charged by Ecclestone's Formula One Management (FOM) company – estimated to be in the region of £15 million last year alone, and in excess of £140 million over the past decade-and-a-half – that is crippling the grand prix and casting its future into doubt.
The inaugural outing in Melbourne in 1996 cost the city just under £5 million in hosting charges, whilst yielding more than £31 million in revenue, the Daily Express
reveals. Those benefits, however, fell to barely £19 million in 2010, whilst Ecclestone's fee has conversely tripled. The ability of other venues around the world to offer more for the privilege of welcoming F1 could just be the final nail in the coffin, Walker fears.
“That will break the camel's back,” he lamented. “We all know that could kill it. We could be priced out of the market in 2015, and that's what the [Victorian] government is saying. This could be an end of an era but, on the other side, the Melbourne Major Events Company and Tourism Victoria are saying it's worth it – and we can prove it's worth it.
“Revenue has started to fall for reasons we never worked out, and you have to understand the international costs of staging the event have gone up. When the Victorian government signed the original deal, oil was £5 a barrel. Now it's more than £61 a barrel and it takes six 'planes just to transport all the equipment to Australia. There are 150 staff who travel to Australia paid for entirely by Ecclestone.”