56 million dollar bill for Australian taxpayers

This is the annual report of the Australian Grand Prix Corporation, the company that manages the Melbourne event in F1 and Moto GP, obtained by Racingbusiness.fr, which gives us this information. However, before angering local taxpayers, it must be put into perspective with the benefits for the city.

The Australian Grand Prix Corporation succeeded in increasing its revenue, both from ticket sales and their sponsorship contract. Thus, they had decided to install an additional grandstand to meet the demand. This resulted in the presence of 310,000 people over the weekend, with 115,000 attending on race day. This is the highest attendance since 2005. From a financial perspective, this increase in the number of spectators translated into a slight increase in ticket sales, from 26.5 to 27.9 million Australian dollars. However, this is still far from the 34.9 million recorded during the 2008 edition, before the economic crisis affected the global economy.

The organizers also focused on the sponsorship aspect of the event, with the airline Qantas leading the way as the title sponsor once again. Nine additional companies have also decided to partner with the event. Nonetheless, the revenue generated remains relatively limited as it has increased from 5.8 to 7.3 million Australian dollars.

However, the organization’s expenses have increased much faster than its revenues. The most significant expense, of course, is the fee to be paid to Bernie Ecclestone’s FOM and the construction of temporary infrastructure for the event. This has increased in one year from 43.8 to 54.6 million Australian dollars. Expenses also include recurring engineering costs, which have risen in one year from 26.8 to 28 million Australian dollars.

In order to make the economic equation work, there’s no other solution than to call upon the local government to fill the gaps. That’s why the contribution from local authorities increased in one year from 50 to 56.6 million Australian dollars. However, more than just a public subsidy, the payment made by the State Government of Victoria should be seen as an investment in the image and reputation of the city and region. *Formula Money*, one of the references for economic analysis in F1, states that the media impact of the 2012 edition, generated by the 700 journalists on site, can be valued at 217.2 million dollars, an increase of nearly 14% compared to the previous edition.

To these figures, one must also add the additional income from taxes paid by visitors for their on-site consumption (hotels, restaurants, bars, souvenirs…). The return on investment is therefore largely positive for the city, even if this is not necessarily obvious at first glance. The situation is therefore quite different from South Korea, which lost 36 million dollars in 2012, as the Yeongam circuit is located in the middle of fields and the stands are largely empty…

With the participation of www.Racingbusiness.fr