Australian GP financial report.

[Super Tourer]

It's not often we get a glimpse behind any of the finances involved in F1. The Grand Prix Corporation, headed by Ron Walker (a staunch supporter of Bernie E), have released their figures.

The Australian Grand Prix cost the state $9.5m in 2003-2004 according to the latest report from the grand prix corporation. This year's figures reveal an increased attendance of 3.5%, resulting in ticket sales of $30m, with total revenues up to $38m. But expenditure has increased by 6.2% to $47m. This is due to contractual commitments to FOM, the cost of corporate catering and facilities and the extra costs incurred improving safety.

The race has, on paper, lost money on an on-going basis.

Losses from the event are increasing with each year. Obviously calculations involving the historical exchange rates are complicated but we calculate that in 2001 the
event lost $2.9m, in 2002 that went up to $4.8m and in 2003 it reached $6.9m.

Some of this is down to the costs of holding an event largely based on temporary structures which are costly to build and remove, however it's worth contrasting that with the cost of building a new 'world class' facility, which BE is so keen on. We know that this can be any figure you like, from $200M upwards.

However, according to Ron walker the 'on paper' losses are offset by an economic benefit to the state of $700M since the first race in 1996.

It's an interesting insight that shows that whilst the event provides some sort of quantifiable benefit, some state funds will support it. However, it also shows that even a very successful and popular race like Melboure, would not stand on it's own two feet financially.

It's probable that Melbourne is not on the same huge cost terms that BE is asking from the emerging countries, which is alleged to be $30M in fees from FOM to hold a race.

http://www.grandprix.com/ns/ns13784.html

[RWC]

Oh well,good luck to 'em i guess.If they wan't to waste money for the sake of having an excuse for a party/event that's ok (Something you can't deny the victorians-they love their sport!).Pity it's that amoral political f1 cr*p though.

I'm one of those that are extremely doubtfull of the usual 'economic benifits' they constantly trumpet -because a LOT of the punters attending the race are simply locals anyway....net economic benifit to the state from them is *nill*

However i did some very basic math and found that -in this case- the government is losing some money but some groups like hotels are likely making alot more than that loss...

[pirenzo]

That's no different to any other race.
I think Melbourne does quite well compared to many others. I doubt any of the race organisers make a profit or even close.

[jetsetter]

When you compare the Melbourne attendances to some others in F1 then if that event runs at a loss then quite a few GP's around the world must as well but as Ron Walker states the money it makes for Melbourne are phenomenal as it brings F1 fans in to Melbourne once a year that normally wouldn't travel there which has to be good for the states economy.

[climb]

Maybe the State should apply some tax on that extra revenue, to recover the moeny lost, e.g. on food, beverages and merchandising sold round the track, as well as hotel fares for the race weekend.
A very very small tax put on many things sold wouldn't even be perceived by the attenders, and could solve the problem.

[cavvy]

Originally posted by climb
A very very small tax put on many things sold wouldn't even be perceived by the attenders, and could solve the problem.

Climb,
The prices that are charged, add a bit more, I'd have to sell my caravan, sold the house to go in 2000.
I believe the economic activity argument but only after doing my own research.
The same logic is used for the WRC round in West Australia, which due to different time zones gets almost nil coverage in the rest of Australia.

[climb]

I just did a theoretical calculation:
if the state loss is 7 millions and the total general revenue is 700 millions, an 1% more would solve the problems.
I mean, paying a hamburger, say, 4.04 instead of 4.00 dollars, or a hotel room 80.80 dollars instead of 80.00 shouldn't make you bankrupt, I reckon.