Losses for Australian Formula One GP continue to mount - Mercedes-Benz Forum

 
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post #1 of 6 (permalink) Old 10-31-2007, 11:45 AM Thread Starter
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Losses for Australian Formula One GP continue to mount

Losses for Australian Formula One GP continue to mount
Wed 31 Oct, 12:53 PM


MELBOURNE (AFP) - Pressure is building on Melbourne over hosting the Formula One grand prix with the Victorian state government Wednesday reporting a loss of 34.6 million dollars (31.8 million USD) for this year's race.

Melbourne is contracted to stage the event until 2010 but the Australian GP has been haemorrhaging financially since it was shifted from Adelaide in 1996.

The grand prix report, tabled in state parliament here Wednesday, revealed race revenue decreased from 47.5 million dollars last year to 43.4 million dollars this year.

The event in March cost more than 78 million dollars to run, with the Victorian government picking up the tab for the shortfall.

The losses were attributed to dwindling ticket sales and sponsorship revenue.

Some economists say rising costs and falling attendances mean the grand prix has a limited life-span in Melbourne.

Economist Francis Grey told The Age newspaper: "Economically, the race is a loser, every year.

"It's been a loser since the beginning, and the losses are only growing larger. Victorians are poorer as a result of having this race."

The FINA World Swimming Championships were also among Victoria's big sporting drawcards to record losses this year.

The championships, held in the Rod Laver Arena last March, lost 11 million dollars against a 50 million dollar outlay, another government report said.
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post #2 of 6 (permalink) Old 10-31-2007, 06:38 PM
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Sorry to hear that. I know it is over $8000 for two to go to the Australian GP from the East Coast of the US. I have seen packages that are a bit cheaper but not much.

I don't see how any of the extended distance races can survive without government money, especially since Bernie milks the promoter for so much up front monies. I assume that Canada is going to be a target next since it can't really be as profitable unless there is government injection. And with Canada standing alone on this leg now, it must be more vulnerable.

At some point, if costs keep rising Formula1 will go back to the relatively sleepy Euro Championship it WAS with only the developing nations willing to pay for world stage credibility added to the mix.

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post #3 of 6 (permalink) Old 11-01-2007, 12:23 AM Thread Starter
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For some reason, the older Adelaide events were profitable. It would be sad to see the Australian GP go.
Even the historic Silverstone GP faces an uncertain future.
With plenty of cash on hand, either Dubai or Abu Dhabi, or even both UAE Countries are ready to host Formula One GP in the Persian Gulf States region. Also India is certain to follow Singapore within a few years.
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post #4 of 6 (permalink) Old 11-01-2007, 08:47 AM
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The great irony of this is that the event was moved from Adelaide to Melbourne on the back of the additional sponsorship the Melbourne event would generate. So it seems that someone confused ambition with ability when setting the sponsorship revenue budget.

I hope that the GP can stay in Australia. It seems strange to me that a wealthy country like Australia might not generate enough cash to keep an event that is seemingly capable of running in much less cashed up places. Either the price is too high Bernie or there is too many people with their hands in the till.

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post #5 of 6 (permalink) Old 11-01-2007, 09:55 AM
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The great irony of this is that the event was moved from Adelaide to Melbourne on the back of the additional sponsorship the Melbourne event would generate. So it seems that someone confused ambition with ability when setting the sponsorship revenue budget.

I hope that the GP can stay in Australia. It seems strange to me that a wealthy country like Australia might not generate enough cash to keep an event that is seemingly capable of running in much less cashed up places. Either the price is too high Bernie or there is too many people with their hands in the till.
I think it is a little of everything you point out that Australia GP looses money but also there are not that many people that live in Australia and their income is not as high as some countries sponsering the GP and as well Quantas is exclusive on internal flights and with that monopoly comes very high flight prices.
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post #6 of 6 (permalink) Old 11-03-2007, 07:36 AM
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I think it is a little of everything you point out that Australia GP looses money but also there are not that many people that live in Australia and their income is not as high as some countries sponsering the GP and as well Quantas is exclusive on internal flights and with that monopoly comes very high flight prices.
IMO a general admission ticket is a little steep, considering general admission now has all of the best areas out of bounds, because the corporate grandstands are everywhere.

As far as last year goes, the V8 supercars didn't run due to the lack of pits for their team cars. That cost heaps of sales as a lot of people I know didn't bother when they didn't have the V8's in a support race. They are back next year though. We I go I always take my own food and drinks in, to save queuing up for food and paying $10 for a can of scotch and coke.

Qantas dosn't have exclusive rights to internal flights as you can also fly Virgin blue or Jetstar which is a cheap Qantas subsidiary. Flights could always be a bit cheaper though.

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