Big Losses for Oz GP......Again.

[Peat]

from autosport.com:
-------------------------------------------------------------------------
Australia's Formula 1 grand prix has posted a big loss this year, the country's media reported on Thursday. The Victorian government said the race had cost taxpayers $46 million, the highest in five years, and more than double what it cost in 2006.
Despite the bigger attendance figure for this year's race, sale revenue has continued to go down.
The news have prompted criticism from various parties.
"I think it is just outrageous, it has gone past a joke and it is time both sides of politics started to seriously reconsider the ongoing cost of taxpayers bailing out of this event," independent state MP Craig Ingram told the Age newspaper.
"The cost of $49 million for a car race when as a local member of parliament we struggle to get funding for health services, education, support services for disabled kids at schools, for roads and other infrastructure — I just think there is a whole range of services and other infrastructure which need that sort of money more than a car race."
Peter Logan from the Save Albert Park group told the Sydney Morning Herald that the race was not proving to be beneficial for the tourism business either.
"Three years ago, the auditor-general found it does not produce the economic benefits the Government has claimed and he found no tourism benefit for Victoria," he said. "This cost of $49 million is just a huge cost on all Victorian taxpayers."
Major Events Minister Tim Holding defended the race, however, saying it was good for Victoria.
"The economic benefit to Victoria far outweighs the cost of staging the Formula 1 Grand Prix," he was quoted as saying by the Age.
"The race was seen by about 12.8 million people in Europe this year and the massive television exposure that the Melbourne Grand Prix receives has helped to build our world-wide reputation as a great place to visit and a great place to live.
"This year's Grand Prix attracted the biggest crowd in five years and a television audience of 4.6 million in Australia, and with Mark Webber in such good form we expect that next year's Grand Prix will be even more exciting."
Melbourne has a contract to host the grand prix for the next five years.
------------------------------------------------------------------------

Obviously it is not uncommon for GP promoters to post a loss, but the figures here seem rather large.

I have to say, i tend to side with the anti's in this case (with the info presented above).

[Spritle]

Originally Posted by Peat

from autosport.com:
-------------------------------------------------------------------------
Peter Logan from the Save Albert Park group told the Sydney Morning Herald that the race was not proving to be beneficial for the tourism business either. "Three years ago, the auditor-general found it does not produce the economic benefits the Government has claimed and he found no tourism benefit for Victoria," he said. "This cost of $49 million is just a huge cost on all Victorian taxpayers."

Major Events Minister Tim Holding defended the race, however, saying it was good for Victoria. "The economic benefit to Victoria far outweighs the cost of staging the Formula 1 Grand Prix," he was quoted as saying by the Age.

Huh? What "economic benefit", SPENDING $49 million is a benefit?

Hey Austin, wake up before you go broke!

[JamesH]

Can't argue with those numbers.

Cancel the race. The tax payer should not be picking up to cost of a few politico's jolly day out.

Alternatively, BE could drop the cost of running the race to a point where it becomes cost effective to run.

Oh, hold on a sec. For a moment there I thought BE interests coincided with the F1 fans/supporters. My mistake.

[ECW Dan Selby]

Ah this is a shame. Enjoy Melbourne whilst we can, guys.

Selby

[JABWOA]

This is what happens with Govt funded events, they make a loss. However, the stated economic benefits raised is only marginally more than the loss, so that is a worry. I say the AGP will lose the F1's once its current contract expires.

Previously the benefits have been double the loss generated.

Plus, only 12.8 million viewers in Europe? That's poor.

[GTRMagic]

It shouldnt be an issue for the event to make a loss. There is economic benefit to the city, the number of Melbourne signs on the circuit walls should have been enough for the tourism bods to be excited at the exposure.

Each year we go thru this storm in a tea cup, and the next year the F1s show up and rock n roll... and contract renewal comes, and Mr Ecclestone and Mr Walker come away all smiles!

Its a great event for Melbourne.

[E.B]

Well said GTR.

As for the 12.8 million viewers in Europe I find that figure hard to believe, and low, given the viewership in the UK alone would be several million. (I have read of figures of the Brazilian race attracting over 16 million in the UK alone. Not to mention Spain, Germany etc.

Plus, as an aside from those quoted, the many (tens of) millions who watch F1 in Asia....

Its just the annual ***** fight, the same as we had when we had a change of government who promised the event would not be supported.... until the real facts were taken into account and even the newly appointed labour government started to harp on about the overall benefits far outweighed the costs.....

Common sense will prevail.

[duke_toaster]

WRT F1 viewers in Europe, that might only be using live viewers, but even so that sounds like an under-estimate. Due to the times, most broadcasters show the race on tape delay in the afternoon, which gets more viewers.

[wnut]

The Auditor General found that the Grand Prix did not provide the benefits that the Government claimed in his report on Major events on the 2005 Grand Prix which lost $28.4 million.

Progressive losses to 2005 are provided here:

http://www.maynereport.com/articles/2008/07/14-1316-2336.html

"The problem with the Grand Prix – and many other major events – is that the economic benefits are grossly exaggerated using dubious assumptions. In the case of the Grand Prix, these have been designed to distract attention from Ron Walker's original broken promise in December 1993 – that the event would cost $5 million to establish and then make a profit each year."

The politicians disputed the Auditor General's figure, but I guess you have to choose who to believe in financial matters, experts or politicians.

Only a government spending taxpayer money could find value here!

[KateM]

Its ridiculous that such a well-attended race is making such a huge loss really. Their problem is they probably re-negotiated their last contract at the wrong time. Bernie is being mildly more reasonable with new deals in the current climate. But the sanctioning fees are still far too high.

[GTRMagic]

When Mark Webber arrives in Melbourne as World Driver's Champion, in his blue Red Bull charger, all will be forgotten!

[E.B]

Originally Posted by GTRMagic

When Mark Webber arrives in Melbourne as World Driver's Champion, in his blue Red Bull charger, all will be forgotten!

Crikey..... the AGP Contract expires in 2015, so he best get on with it.

[JamesH]

Originally Posted by GTRMagic

It shouldnt be an issue for the event to make a loss. There is economic benefit to the city, the number of Melbourne signs on the circuit walls should have been enough for the tourism bods to be excited at the exposure.

Each year we go thru this storm in a tea cup, and the next year the F1s show up and rock n roll... and contract renewal comes, and Mr Ecclestone and Mr Walker come away all smiles!

Its a great event for Melbourne.

Well, as long as you, the tax payer, don't mind funding Mr Eccelestone and the F1 circus on their Oz jolly. Because I very much doubt the economic benefits are even remotely close to the actual price you pay. You can get a lot of TV advertising around the world for £20mil, or whatever the difference is.

[bella]

from what i hear from people who attend the race the facilities for the spectators are a cut above everywhere else... perhaps they're spending money in places other circuits don't and that's having a huge impact on the cost.

everyone staffing the information booths have to be paid, all those pretty girls walking around in lycra and short skirts have to be paid, all the cleaners, spectator marshals, security...

[chillibowl]

Originally Posted by bella

... security...

security...in the post 9/11 world i cannot image the financial responsibilities incurred by the various levels of government that are not even taken into account.

heightened security, more local and federal officers, military presence for visiting dignitaries and no fly zones, air and sea port security etc...even with taxpayer support it is amazing that events on this level even happen any more in the so called 'first world'.

on a side note, i miss the cigarette companies. they loved spending money on us and never once complained about it.

[E.B]

Originally Posted by chillibowl

....on a side note, i miss the cigarette companies. they loved spending money on us and never once complained about it.

TBH I wonder what impact, on smoking related matter, the loss of the F1 smoking sponsorship had on the world.

I dont think it would make non committed to smoking people start to smoke. The exercise of branding in F1 was more likely to incite a brand change in a generally brand loyal market. I can recall at times back then when as a smoker I might swap brand of ciggy in line with my F1 team interests...... Gold Leaf, JPS, Marlboro, hell, I even smoked Gitanes for a while when I had a Ligier moment. But I was a smoker who would buy anyway. It never influenced me to smoke or not to smoke. People did not suddenly stop smoking because F1 is no longer smoke friendly.

[/end of rant]
Inserts then and now of an F1 smoker, Keke R.

[GTRMagic]

Originally Posted by JamesH

Well, as long as you, the tax payer, don't mind funding Mr Eccelestone and the F1 circus on their Oz jolly. Because I very much doubt the economic benefits are even remotely close to the actual price you pay. You can get a lot of TV advertising around the world for £20mil, or whatever the difference is.

I want to watch Formula One in my home country. If this is the price we as the tax payers must pay, then so be it.

I am not a resident of Victoria, so when I go to the event I pay for a plane, a hire car, accommodation & meals.. and tickets... so while I dont pay state taxes per se, the GST is spent in that state and stays there...

Shall we get Lara Bingle to ask "Where the Bloody Hell Are Ya?" again for that £20mil? I would prefer to watch the F1 at full noise!

To help with the shortfall, I hear the Melbourne police will be even more vigilant on hoons... Mr Hamilton watch out

[E.B]

Originally Posted by GTRMagic

To help with the shortfall, I hear the Melbourne police will be even more vigilant on hoons... Mr Hamilton watch out

[wnut]

Originally Posted by Peat

from autosport.com:
-------------------------------------------------------------------------
Australia's Formula 1 grand prix has posted a big loss this year, the country's media reported on Thursday. The Victorian government said the race had cost taxpayers $46 million, the highest in five years, and more than double what it cost in 2006.
Despite the bigger attendance figure for this year's race, sale revenue has continued to go down.
The news have prompted criticism from various parties.
"I think it is just outrageous, it has gone past a joke and it is time both sides of politics started to seriously reconsider the ongoing cost of taxpayers bailing out of this event," independent state MP Craig Ingram told the Age newspaper.
"The cost of $49 million for a car race when as a local member of parliament we struggle to get funding for health services, education, support services for disabled kids at schools, for roads and other infrastructure — I just think there is a whole range of services and other infrastructure which need that sort of money more than a car race."
Peter Logan from the Save Albert Park group told the Sydney Morning Herald that the race was not proving to be beneficial for the tourism business either.
"Three years ago, the auditor-general found it does not produce the economic benefits the Government has claimed and he found no tourism benefit for Victoria," he said. "This cost of $49 million is just a huge cost on all Victorian taxpayers."
Major Events Minister Tim Holding defended the race, however, saying it was good for Victoria.
"The economic benefit to Victoria far outweighs the cost of staging the Formula 1 Grand Prix," he was quoted as saying by the Age.
"The race was seen by about 12.8 million people in Europe this year and the massive television exposure that the Melbourne Grand Prix receives has helped to build our world-wide reputation as a great place to visit and a great place to live.
"This year's Grand Prix attracted the biggest crowd in five years and a television audience of 4.6 million in Australia, and with Mark Webber in such good form we expect that next year's Grand Prix will be even more exciting."
Melbourne has a contract to host the grand prix for the next five years.
------------------------------------------------------------------------

Obviously it is not uncommon for GP promoters to post a loss, but the figures here seem rather large.

I have to say, i tend to side with the anti's in this case (with the info presented above).

How are the Austin figures stacking up?

[wnut]

True cost of running the Australian GP in Melbourne
Herald Sun newspaper 8 June 2011

http://www.heraldsun.com.au/sport/gr...-1226071261555

Claims of $100 million ( $1.00 AU = $1.06 US)

[Spritle]

Originally Posted by wnut

How are the Austin figures stacking up?

The difference between Melbourne & Austin is that Australians actually care about F1.

When Austin finally wakes up and realizes that they are losing their shirt, (and they will) on an event nobody cares about in the US; they may actually do something about it.

[JeremySmith]

Originally Posted by Spritle

The difference between Melbourne & Austin is that Australians actually care about F1.

When Austin finally wakes up and realizes that they are losing their shirt, (and they will) on an event nobody cares about in the US; they may actually do something about it.

How do you know that is going to happen, maybe you would like to explain to the audience?

Go ahead....

[JABWOA]

Of course Austin will wind up with a facility that can run 365 days a year - they've already signed up MotoGP for 10years plus several national circuit racing series both 4wheels and 2wheels.

[JeremySmith]

Originally Posted by JABWOA

Of course Austin will wind up with a facility that can run 365 days a year - they've already signed up MotoGP for 10years plus several national circuit racing series both 4wheels and 2wheels.

Who said that? Please link to your source...

[sizzle]

Originally Posted by Spritle

The difference between Melbourne & Austin is that Australians actually care about F1.

Do they though. You and I as enthusiasts may but I am not sure the majority do.