- 25 Jan 11, 07:56#236199this is what the boss has to say about it all
Ron Walker, the boss of the Australian Grand Prix, has labelled as “sad” the suggestion by Melbourne’s lord mayor that the city should drop its Formula 1 race when its contract ends in 2015.
Robert Doyle called the future of the popular Albert Park race into question over the weekend, suggesting that while the event had served the city well since 1996, it was now proving too big a burden for the taxpayer – estimating that by the final year of its deal the event would cost the state $70 million.
His comments have sparked debate in the Australian media and prompted Walker to defend the race, as well as criticising Doyle.
“This is an annual debate now and it’s a sad thing for the mayor of a major capital city to come out so publicly against a major event like the grand prix,” Walker told Melbourne’s 3AW radio station.
“It’s still the largest sporting event on a single-day basis in Australia; it’s larger than the Grand Slam final, it’s largely than the Melbourne Cup, it’s larger than the tennis and it gets a huge overseas audience.
“It’s a free-to-air audience as opposed to a cable audience that most of the others enjoy. It is a huge promoter for Melbourne.”
Rumours over the future of the loss-making event have swirled for several years but in 2008 organisers signed a contract extension to the middle of the decade after a new later start time for the race was agreed with Bernie Ecclestone.
Last year’s event had to be underwritten to the tune of $52 million but Walker argues that the wider economic benefits associated with having the race justify that spend.
“The capital cost of taking 30,000 tonnes of equipment into Melbourne park, putting it up, pulling it down, and then repairing the park costs about $26m a year,” he said.
“Now the government is spending about a billion dollars building a new tennis centre, refurbishing the old, adding to it etc etc…
“If you take the interest on that money alone….well there’s 50 or 60 million that they subsidise for tennis, plus all the other subsides they give.
“The government is suffering a deficit of about $52m a year for the grand prix, but on the other side of the ledger there’s an economic benefit of around $160m a year [for] all of Mr Doyle’s hotels, and for all of his restaurants, to do a very good trade.
“And of course then there’s the tax that’s collected at about $18m a year. So if you add that together on one side, and then if you compare it with the deficit on the other, it’s a huge profit for Melbourne.”
Walker – who added that the organising company had managed to make $6m worth of savings in capital costs last year – would imminently be meeting Victorian state premier Ted Baillieu to review costs ahead of the 2011 event in March.
The Herald Sun today reports that in that meeting Baillieu “demanded a radical restructure”, while the newspaper also suggests that job cuts and the scrapping of the annual gala ball could be on the agenda in order to keep losses below $50m.
"We look forward to the grand prix performing financially better than it has and we will be looking to make sure that happens," Baillieu was quoted as saying by The Age.
"I am confident we can reduce costs and we look forward to that happening."
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