Melbourne F1 Scrutiny of Costs
24 January 2013
The cost of the Full Scale F1 event at Albert Park, Melbourne is again under scrutiny after confidential cost documents were leaked to the media yesterday.
The Age newspaper screamed "Melb Grand Prix fee more than $30m: report" and goes on to detail how confidential leaked documents show the fee to Formula One Administration Limited (of which Bernie Ecclestone is the President and CEO) to be $31m USD in 2011 increasing by 5% each year to $38m USD in 2015 when the current contract expires.
The reality is the annual report of the Australian Grand Prix Corporation Limited is freely available on their website or via the Australian Stock Exchange. While it doesn't show how much the fee to host the Grand Prix is, it does give some good numbers and with a sharp pencil and the back of an envelope you can quickly see that the fee is both substantial and increasing. Either that or the management of Australian Grand Prix Corporation are paying the casual staff that man the gates substantially more than market rates :)
Of course Ecclestone fires back "Bernie to Baillieu: you signed F1 deal, don't complain". Accurate but slightly inflammatory.
The good news is that Australia has a Grand Prix locked in contractually until 2015. The bad news is that the Victorian taxpayers subsidised the 2012 GP by $57m (approximately 50% of the total cost). The worse news is that other countries are lining up to pay Ecclestone his significant hosting fee. So Bernie is holding all the cards. If Australia wants to host a Grand Prix from 2016 onwards then we need to find other ways to reduce the government subsidy.