JANUARY 24, 2011
More concern over Melbourne costs
Melbourne's Lord Mayor has told Australian newspaper The Herald Sun that the city could become the first to walk away from a grand prix when the current deal with Formula One Management expires in 2015.
Currently, Victorian state tax payers subsidise the race by more than $40m and this figure is set to rise. Lord Mayor Robert Doyle said: "In 1996 (when Melbourne took over the Australian GP from Adelaide) corporate sponsorship was far more generous than it is today but the race still needed to be underwritten by about $1.7 million. Last year it was $50m…
"Fast forward to 2015. Though the documented benefits for the city may include hundreds of millions of dollars of advertising value and tens of millions of dollars of local revenue, an event that will draw between 250,000 and 300,000 people over three days will come at a cost that will approach 70m taxpayer dollars.
"It's the old argument: pay up front but get many times the value of the upfront payment in downstream economic benefits. For most events that formula is persuasive. But $70m?"
Speaking of the future possibilities, the mayor talked about either upgrading Albert Park, hosting a night race at a purpose-built track, moving the event to Sydney or Perth or walking away from the race altogether with the calendar slot going to a different country."
"The final possibility is that we decide that it has been 20 fantastic years, the benefits to the city and the state have been enormous, but the cycle has run its course. My judgement would be: Get ready. Time's up."
Australian GP chief Ron Walker has responded by saying that race organisers are doing their utmost to limit the state burden.
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