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The Crikey team have assembled a range of material on the upcoming Melbourne Grand Prix for readers to consider. Steve Bracks, John Thwaites and John Brumby should go through all of this before supping with Ron Walker and Bernie Ecclestone next weekend.
The Victorian Grand Prix is on next weekend. It will be interesting to see if former Labor leader John Brumby is down there schmoozing with Liberal Party Treasurer and race supremo Ron Walker. This is an extract from the Herald Sun in March 1996, shortly before that year’s state election.

ALP Vow To Sack Walker

By Damon Johnston

Labor leader John Brumby has vowed to axe Melbourne Major Events Company chief Ron Walker and accused him of damaging the state’s business reputation.

In an interview with the Herald Sun, Mr Brumby said Mr Walker was likely to be dumped within six months if the ALP was elected on March 30.

Mr Brumby claimed potential investors had expressed concerns about an alleged conflict of interest over Mr Walker’s casino shareholding and his MMEC role.

“I hope to bring some new blood in and we’ll be putting a bit of a broom through a few areas. He’s got other interests in life and he’ll be pursuing those,” Mr Brumby said.

“There are clear conflicts of interest between the work he does for MMEC and his private interests, which double as the casino’s interests.”

And so it went on…..

Steve Bracks also said before coming to office that Ron Walker would have to relinquish his Liberal Party positions, but he has not done that yet remains head of MMEC, the Grand Prix and the Commonwealth Games.

Ron will have a relaxing Grand Prix even though this year’s loss could top last year’s record of $8 million. You see Ron’s five million PBL shares, which he collected in exchange for his exposure to Crown casino, are now worth about $75 million.

BEYOND THE BARRICADES

With the mainstream media reluctant to give GP protestors Save Albert Park much of a run these days, Crikey is publishing the segment put together by SAP’s Keith Wiltshire which is broadcast each Monday at 6pm on 3CR

“COMMENTARY ON THE NEWS” FROM KEITH WILTSHIRE

In an article not based on PR handouts, Alan Attwood of The Age (26th) heralded the first Albert Park Grand Prix of what he calls ‘the post-Kennett era’. Surely ‘the Kennett-Bracks era’ better conveys the continuity of Grand Prix policy. As Save Albert Park’s spokesman in the article, Ross Ulman, puts it: ‘there’s some satisfaction in having outlasted Kennett (but) that’s not hugely important. We have just as big a fight with this government’. That’s a fight for full disclosure of event contracts and financial information; for public awareness of the scale of disruption to park users; and for an end to associated tobacco advertising. Mr Attwood notes that the GP is now marketed more as an event than a motor race: ‘only a small percentage of the population can get excited about “a sexy new McLaren”‘.

What are we paying for?

The current press advertisements are certainly about 85% ‘celebrity’ focused, though one well-known person has apparently withdrawn from the celebrities’ race. We rely on the Sunday Age Spy report (27th) which interprets Mr Neil Mitchell’s exit as due to his realising ‘how mickey mouse this local derby must appear to millions of interstate and international folk supposedly riveted by our Grand Prix’. So no ‘crash for comment’, as the Spy put it. Mr Attwood ended his piece: ‘While the race continues to engender year-round debate, the F1 drivers perform an annual hit-and-run’ (but) ‘after little more than a week…the racetrack once again becomes a road’. Well, after rather more than that, and then the road becomes a series of accident black-spots. It’s a good article for reading between the lines, though still no substitute for the information in Save Albert Park’s own fact sheets, newsletters, financial analyses and Parkwatch reports, which the media continue to ignore.

How else could Channel 10 (24th) refer to a pop group singing the national anthem to ‘a worldwide TV audience of billions’. Of course, for this event: anything goes. Planet F1.com reports unofficial viewing figures for the 1999 GP season of 57.5 billion. It’s a count of the number of times a program’s seen, even by the one person, and ‘a program’ isn’t defined. Given a world population of about 5.8 billion, every man, woman and child saw ten programs – or a few million really do live it. Following Ron Walker’s recent wild claim of ‘10,000 or more part-time jobs for the whole 4-day event’ the Herald-Sun referred to 16,000 part-time jobs in the corporate tents alone, at risk from union bans. Bans imposed according to formula 1.com by ‘the Workers Union in Victoria, Melbourne’. Clearly, the odd extra nought’s neither here nor there, and geographically, nor are we.

We could almost be in Bondi, where residents are protesting against the holding of Olympic Games beach volleyball on their beach, which will be off-limits from 1st May during construction of a 10,000-seat temporary stadium. An attempted injunction has failed, and the bulldozers will be confronted despite pleas from the International President of the sport who argues that no damage will be done to the beach, and the facilities that remain will benefit the locals. The usual issues; the usual spin.

3AR’s Background Briefing (27th) treated an issue closer to home: the mounting pressure on governments to deal with tobacco as a public health problem. And to drop R&D tax concessions for the tobacco industry. Sound effects from the nicotine-stained Melbourne F1 dramatised the references to MPs’ acceptance of the hospitality of tobacco companies – free flights and accommodation, wining and dining in corporate boxes. Of course, for their organisational health, both major parties have accepted donations of $100,000s from Philip Morris over the last 5 years. Sponsors of a F1 racing team, BAT Australasia (formerly Rothmans) donated $20,000 last year to the Free Enterprise Foundation, which in turn gave $656,000 to the Liberal Party. But huge donor organisations don’t have to disclose the real sources of the money they dispense: the Cormack Foundation, for example, which gave $900,000 to the Liberal Party in 1998 but $1.45M in 1999 (Age & Australian, 2nd). A 60% jump. Is there a smoking gun? The program reminded us that Rupert Murdoch, boss of the Herald-Sun (a GP sponsor) and The Australian, is on the board of Philip Morris (and a Morris rep Geoffrey Bible on his News Corp board). Curiously, the Herald-Sun on the 28th reported the tax concession row; The Australian didn’t.

Health and safety issues of a different kind certainly confront the State government in the East Gippsland and Ottway forests, both water catchments. These deserve detailed comment later, but questions about the RFA process, and the State Forest Service, grow more urgent daily.

Meanwhile, with storages below normal, the Environment Minister has called for restraint in water use. But imagine Albert Park today as a map of Victoria – with emerald green grass where the TV cameras will briefly focus, and a much duller landscape elsewhere. Priorities. And when 60% of the Herald-Sun’s voteline readers – as we were told on the 28th – think Kennett should be a major events ambassador for Victoria, take a breath. The Kennett-Bracks era of major events might yet take off with a vengeance, and perhaps the motto: anything goes.

Lastly we offer you this article from last week’s Economist magazine : THIS year’s season of Formula One races begins in Melbourne on March 12th. A few weeks later a meeting will take place in Brussels that could dramatically change the face of the sport. The European Commission’s competition authorities will sit down with the Federation Internationale de l’Automobile (FIA), the sport’s governing body, to hear its objections to the commission’s interim ruling last summer that the sport is organised uncompetitively. In particular, the commission is unhappy with the way the FIA has awarded exclusive broadcasting rights to a company owned and run by one of its vice-presidents, Bernie Ecclestone. It thinks TV rights could be negotiated track by track or team by team, allowing other TV companies to get part of the action. Max Mosley, head of the FIA, says that the bureaucrats in Brussels don’t understand the reality of motor sport: the racing teams have enough on their hands and prefer to leave it to Mr Ecclestone to handle the broadcasting contracts. Besides, Mr Ecclestone comes round at the end of each season and shares out some of the proceeds from his sale of the pictures to networks round the world. Occasionally, private resentments by team managers break into public warring between a few of them and Mr Ecclestone. But, in the end, the racing teams are happy to let him get on with making pots of money and handing some of it back to them. Needless to say, some broadcasters and TV production companies are not happy with this. More seriously, the FIA forbids racing teams from competing in other races, which is one reason why Formula One teams stay clear of America’s IndyCar circuit. While Indy racing scores as a live spectator sport, Formula One-with its long, narrow straights and its focus on one car behind another-is made for TV. Sponsors love it, which helps explain why Formula One is invading America this year while Indy racing travels little. Another reason for Formula One’s international dominance is that Mr Ecclestone offers big discounts to broadcasters who agree not to show other car races. If the commission sticks to its guns, the FIA is threatening to abandon Europe, which hosts 11 of the 17 Formula One races, for the countries in Asia and South America that are crying out to stage them. Should the sport move away from Europe, its creative heart would almost certainly stay in the crescent of south-east England where most race teams are clustered, and where Indy cars are also developed. But it would be a blow to the hard-core European supporters who descend in droves on circuits like Monte Carlo throughout the season. Formula One, though, is not really about the crowds who go to the races to see cars blur past them in seconds. The real crowds are the ones that Mr Ecclestone has mobilised around the world since he saw the TV potential over ten years ago. His company, Formula One Administration, claims an improbable 40 billion viewers throughout the season, by which it means viewings of not just the races, but of the qualifying and the endless news reports. Such numbers draw big sponsorship and advertising, from oil and tobacco firms, and others. The threats to ban tobacco advertising on cars are not as potent as they seem. Mr Ecclestone’s TV engineers have worked out how to use digital technology to get round the bans. If tobacco advertising on cars or on trackside billboards is made illegal in, say France, all they have to do is to leave the car decals and the billboards blank, and to “paint” the advertisements onto the signal that is broadcast to the rest of the world. The same technology is used to sell the space on a billboard many times over. A Brazilian supermarket chain, for instance, will pay to have its advertisement appear only in the Brazilian coverage of a race. Apart from its run-in with Brussels, the only other problem that the sport faces is boredom. Races too often turn into processions with little real overtaking: a blistering start by stars like Mika Hakkinen or Michael Schumacher can put one of them in front for the whole of the race, barring breakdowns or accidents. Indeed, Formula One is increasingly made up of a trio of leading teams, a handful of middle-rankers, and a long tail of slower cars which somehow cling on, helped by the largesse from Mr Ecclestone. One reason for this stalemate, which the FIA is working on, is aerodynamic. Racing cars are really like upside-down aeroplanes, using their aerodynamics to stay on the ground rather than take off. As a car prepares to overtake, the air turbulence of the wake from the car ahead interferes with the downforce of the overtaker. So, just when it most needs stability, it loses some. The solution being studied is to halve the amount of downforce allowed on any car. Neither the boredom nor the threat from the EU, however, is deterring the world’s leading car companies from becoming more involved in the sport. This year will see some familiar names appearing on the track: BMW is joining up with the Williams team, providing engines and engineering; Honda is doing the same with British American Racing; Mercedes has deepened its successful relationship with McLaren; while Ford has bought the Stewart team from former champion driver Jackie Stewart, and will race under the Jaguar name, which it owns. The reason for the appearance of these big car makers is simple: with a glut of cars in mature markets, they need more than ever to build their reputation. The association of BMW with sporty driving, for instance, enables its mass-produced small cars to command a premium price. Attractive design and advanced engineering are necessary but not sufficient: these days manufacturers need the image, the automatic consumer association with excitement, to lend an aura to their boxes on wheels. And thanks to Mr Ecclestone and all that TV coverage, nothing delivers aura like motor racing…and, outside America, that racing is Formula One. END

Final Remarks

Now that Fairfax chairman Brian Powers, Ron Walker and Bernie Ecclestone have helped negotiate a deal whereby US investment bank Hellman & Friedman have bought 37 per cent of the F1 business from Bernie, it will interesting to see how they fare in Brussels with the competition authorities. America is the land of competition so some of the yanks must be a bit uncomfortable with the way monopolist Bernie runs things. And Steve Bracks should also be uncomfortable when he meets Bernie next weekend to talk about an extension of the race contract from 2006 to 2011. Just remind yourself Steve that Bernie has become a billionaire playing off governments and pocketing the TV rights. This is why we have dropped $100 million on the GP. Compare that with the Australian Open tennis tournament that makes big profits because we keep the valuable TV rights. Maybe Steve should ask for access to the TV rights because if Bernie pulls out of Europe, the last thing he would want is to lose the Melbourne Grand Prix which has provided him with the biggest taxpayer funded subsidy.

By the way Steve, tell John Thwaites that if he does not agree to meet the Save Albert Park people soon he could face a concerted campaign to unseat him at the next election. Remember that it was John Thwaites who convened the first SAP meeting and he had the symbolic yellow ribbons tied to his gate post until the day after the state election. Which corporate box will our deputy premier and Health Minister be in next Sunday. Let’s hope it is not Philip Morris.

Peter Fray

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