Sep 17, 2010

GP revenue slump contradicts crowd numbers

As plummeting sales revenue for the Australian Formula 1 Grand Prix sends the event further into the major events mire, the race's official attendance, which makes up the vast proportion of the revenue figure, has grown, according to the event's organisers.

Andrew Crook — Former <em>Crikey</em> Senior Journalist

Andrew Crook

Former Crikey Senior Journalist

As plummeting sales revenue for the Australian Formula 1 Grand Prix sends the event further into the major events mire, the race's official attendance, which makes up the vast proportion of the revenue figure, has grown, according to organisers. The release yesterday of Australian Grand Prix Corporation's annual report made painful reading for Victorian taxpayers, when it was revealed they subsidised the event by a record $49.3 million in 2010. Total costs for the race exploded to $80.3 million and sales revenue tumbled 8.2% -- from $26.7 million to $24.6 million. But according to counter-intuitive data reported by the AGPC, the Grand Prix's four-day attendance mysteriously rose 5.9% -- from an all-time low of 286,900 in 2009, to 305,000 in 2010. Between 2005 and 2010, sales revenue-- which includes general public tickets and corporate box positions -- declined by 40.8%, while attendances have fallen by just 17.5%. According to anti-GP lobby group Save Albert Park, the only possible conclusion is the event has deliberately cooked the books to maintain the illusion of popularity in the face of widespread public disinterest. The veteran activists say the real attendance decline (see spreadsheet here)  has been far more severe, with their estimate -- based on a seat and corporate box count, photo galleries, TV pictures and even an extra loading for patrons that might be hidden from cameras in the track's bowels -- declining by much the same amount as the AGPC's official sales revenue figure -- from 266,500 in 2005 to 160,000 in 2010. SAP says that the event's 100,000 "phantom attendees" have increased to 130,000 in 2009 and 140,000 in 2010. Visual evidence suggests that large portions of the track -- especially on the warm-up days of Thursday and Friday -- are almost completely bereft of spectators. The issue of rubbery attendance figures has plagued the GP for years, ever since its governing body claimed "401,000" spectators turned up for the inaugural race in 1996. Controversially, the AGPC does not provide turnstiles or barcoded tickets and instead relies on the total tickets distributed (regardless of whether they are used), free ticket giveaways, "visual estimates", and the counting of racing team staff and ancillary workers such as grid girls. When asked why revenue had declined while the attendance increased, a spokesperson for the AGPC, Laura McLachlan, said the discrepancy was due to a reduction in grandstand and corporate hospitality rates in the wake of the Global Financial Crisis, but referred further queries to Major Events Minister Tim Holding. A promised document outlining the Grand Prix's methodology for measuring crowds was not received before deadline. There is substantial reason to doubt the Corporation's maths in relation to corporate boxes. Between 2009 and 2010, the number of corporate box places declined from 9,960 to 7,761, despite the claimed attendance surge. In the five years to 2010, the number of places has fallen by a massive 55.2% from 17,313 to the current sub-10,000 figure. Over the same period, grandstand places fell 25%, from 29,557 to 22,187. Ben Doherty and Josh Gordon's award-winning 2008 Age report, which outlined the full extent of the subterfuge  under the memorable headline "Truth on crowd figures would hurt us, admits GP Chief",  revealed that VCAT judge Marilyn Harbison had sighted the AGPC's methodology, but decided not to release it publicly because the event needed to be able to "compete effectively in the marketplace." Then Age editor Andrew Jaspan intervened after the report was published amid complaints from the AGPC, whose boss Ron Walker also chaired the newspaper's publisher Fairfax Media, and the online version still has a 200-word "clarification" attached to its introduction as a memento. Support for the event remains buoyant in the upper echelons of Victorian society. Yesterday, Holding said the GP was still a "blockbuster" and that the economic benefits far outweighed the costs.

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4 thoughts on “GP revenue slump contradicts crowd numbers

  1. michael dwyer

    The calculation of extra economic activity generated by the GP is mystifying. Any expenditure by Victorians is actually diverted from expenditure on investment, other other goods and services and savings. There is benefit from interstate and international visitors. I understand that it is not difficult to get accommodation in Melbourne at a reasonable price in GP week. This suggests that expenditure from these sources is not that great.

    I have even less confidence in the “economic benefit” figures than Andrew Crook has in the attendance figures.

  2. nicolino

    The figures may be rubbery but at least you have some to work on. On the Gold Coast we never get the truth let alone any figures on attendances when the petrol heads are let loose in October up here.

  3. zut alors

    Years ago when the event was held in Adelaide there were always excellent deals on cheap flights OUT of the city as many alarmed locals fled the melee.

  4. Gavin Moodie

    Of course the cheap flights out of Adelaide were back filling the planes which were flying people in to see the grand prix. Altho I find the race boring I was sad to see it leave Adelaide. It lifted the city and gave it national and international attention once a year.

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