F1: State Government Wants Better Deal For Australian GP

Formula 1

F1: State Government Wants Better Deal For Australian GP

Negotiations are underway about the long-term future of the Australian GP...

Adam Cooper | http://www.speedtv.com | Posted September 26, 2012 Balen (BEL)

Albert Park's current contract to host Formula One runs through 2015. (Photo: LAT Photographic)

Officials from the Australian state of Victoria say they want a better deal from Bernie Ecclestone once the current contract for the Melbourne event expires after the 2015 race.

The not-unexpected news comes hot on the heels of Singapore holding out for more favorable arrangements with Ecclestone before the new 2013-17 deal was finally announced last weekend.

Although the race is seemingly secure for the next three seasons, it emphasizes once again that even events with substantial public funding are becoming difficult to justify in the current economy – which makes private ventures such as Austin and New Jersey look extremely risky.

Victoria tourism minister Louise Asher confirmed that the state government subsidized the 2012 Grand Prix by AUS$56.6m, or around US$58.6m. That figure rose from AUS$50.0m the previous year due to escalation fees built into the contract, and it will continue to rise over the next three years.

The Liberal/National coalition government is keen to point out that the deal now in force – signed by the previous Labor administration in 2008 – was too expensive.

“This is a very, very expensive race, and I personally am not happy with this level of subsidy,” Channel Nine reported Asher as saying. “The Brumby Labor government signed off on a contract that is too expensive for the taxpayer in my opinion.”

However, she said that the race was good for the state: “What the Baillieu government is trying to do is manage a major event which has real benefits for Melbourne and regional Victoria within the parameters of the contract we inherited.”

She added that a 2011 economic impact statement estimated that the Grand Prix generated AUS$32-39m, plus another AUS$35m in media exposure.

State Premier Ted Baillieu said: “We are strongly of a view that the Grand Prix has been good for Melbourne, good for Victoria. Obviously, the Grand Prix is one of our key major events in Victoria, and our major event strategy has served Melbourne and served Victoria very well.”

Adam Cooper notched up his 27th season as a racing journalist in 2011. He has written about F1 for SPEED.com since 2005. Follow him on Twitter.