In 1993 when Ron Walker announced Melbourne
would host the Grand Prix, he said it would one day make a profit. He didn’t
tell us which day that was, but it’s still a long way off. According to an
article published in the Melbourne Weekly Magazine (MWM), the first GP lost
$1.75 million, $2.7 million the following year, and $13.6 million last year.

Formula One, on the other hand, gets more
profitable every year. With TV rights becoming more and more lucrative, and the
fee for the race itself projected to be over $25 million for Melbourne alone this
year (there are 18 races), Ecclestone has himself a handy little earner.

The other side of this argument holds that
the event earns money for the state, if not the State Government or the Grand
Prix Corp.

“Yes we make a loss, you can call it a
loss,” Grand Prix Corporation CEO Tim Bamford told MWM, before saying you have to take the overall
financial impact into account. According to the National Institute of Economic
and Industry Research, the event had a “gross economic impact of $174.8 million
in 2005.” Presumably that’s in the positive.

With Fosters, who pays $5 million for the
naming rights, not signed up again for next year, any shortfall in sponsorship
money will be made up by Victorians. Given the complexity of the financial
arrangements surrounding the GP, is it any wonder that Ecclestone is looking for
more secure ways of keeping the cash flowing in?

As today’s Agereported,
maybe that means sharing the sport around.

Noting the hype surrounding the Commonwealth Games, Ecclestone said: “Maybe we’d be better off to have a lot
more countries (in the formula one series) and have the race every three years
or something like that, so every three years they can make a big hype out of
it.”

Has anyone else noticed the gentle threat in
those words?

“Don’t ban tobacco advertising or hold other
major events when the Grand Prix should be on, because we might have to ‘share
the Grand Prix around’ if you start doing that,” Ecclestone seems to be saying.

With local fans choosing between AFL and the GP this
weekend, and the Commonwealth Games chewing up some of the money we might
otherwise have spent on that new Ferrari cap, a weekend of poor crowds will
give Ecclestone even more to think about.

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW