It’s almost 17 years since the bombshell that Melbourne was pinching Adelaide’s much-loved Formula One grand prix.
It was just before Christmas 1993 and it was made out to be a huge coup.
Front and centre at the announcement were then Victorian premier Jeff Kennett and his mate and then Melbourne Major Events Company chairman Ron Walker, who had done the deal with London-based F1 supremo Bernie Ecclestone to switch the race across the border.
Kennett and Walker reckoned that — despite being on another temporary circuit, at Albert Park, within a stone’s throw of Melbourne’s CBD — the GP would effectively not cost Victorians a cent, that it would break even and perhaps turn a profit.
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The bonus was to be the unlimited exposure it would bring Melbourne and Victoria.
Approaching the final quarter of 2010 the picture has turned out to be very different.
The Australian Grand Prix Corporation’s annual report released last Thursday revealed a record loss on this year’s F1 event of $49.2 million — and more than $185 million over the past five years.
The Age, owned by Fairfax Media, which Walker chaired for several years as well as having been the AGPC’s only chairman, totted up the bill back to Melbourne’s first F1 GP in 1996 and reported that it topped $235 million.
Costs keep going up — including Ecclestone’s sanction fee, although the precise amount of that remains secret — but revenues are on the slippery slide.
Corporate and grandstand sales have shrunk. Attendance figures are imprecise and widely doubted.
So too are the economic benefits. There definitely are some — hotel rooms filled and indirect tax income for Victoria among them.
But the gains are not easy to quantify, and no great effort is made to do it anyway, while the costs crystalise in the AGPC accounts.
The big furphy that is gradually being exposed is the size of the international TV audience.
For so long it was thought to be hundreds of millions, even billions, of viewers, but progressively it has become clear it is nothing of the sort.
Even Ecclestone’s Formula One Management has downsized its still-vague TV numbers, but it is London research firm Initiative Futures Sport + Entertainment, part of the Interpublic group, that has brought some rigour to the scrutiny.
Its research takes in 55 countries that account for 95% of world GDP and it has found the average global audience for the live race telecast of Melbourne’s GP to be about 50 million viewers at best.
That’s a sizeable number but a fraction of what it was meant to be.
So the GP costs have been much greater than foreshadowed and the benefits much smaller.
Victoria’s tourism and major events minister Tim Holding led the defence of the latest loss of almost $50 million in the AGPC report.
He claimed the GP “still represents good value for money”.
Holding has been in the tourism and major events portfolio three or four years now yet showed he hadn’t done his homework or had been badly briefed, making the outlandish statement that the GP “generates a massive global audience in places like the United States” (and Europe).
Even F1’s most ardent advocates admit that F1 has never gained serious traction in the US, where fans much prefer oval-track NASCAR racing.
The American black hole in F1’s landscape is a sore point with car manufacturers that compete in — and even more so those that have abandoned — GP racing.
The American audience for F1 is a couple of hundred thousand households, and declining, in a country with a population of more than 300 million.
While there are moves for a new GP in Texas, American fans too well remember the 2005 farce at Indianapolis when only six cars raced.
Europe remains F1’s heartland, yet curiously Holding reckons this year’s Melbourne GP was seen by only 12.8 million people there.
But he plucked a figure of 4.6 million viewers in Australia.
Ratings agency OzTAM reported an average of 816,000 in Australia’s five major state capitals for the Channel 10 telecast on Sunday, March 29, with 367,000 watching on Ten’s digital channel OneHD.
The peak audience would have been greater than the combined 1.183 million average (for Ten and OneHD) and there are, of course, viewers outside those five capitals, but Holding’s number is almost quadruple that of OzTAM, whose figures are the Australian industry standard.
Is it any wonder then that there is such scepticism, including among many of those with strong passion, even addiction, for the weird world of F1.
South Australians have long since wondered whether they really were the losers in the great GP switch.
Kennett has moved on from politics, or at least parliament, but maintains that snaring the GP was an important boost for Victoria at a particularly low economic point, and that it still has its place.
Certainly it did something for the morale of many Victorians in the mid-90s, but it’s left the state’s taxpayers with a giant headache.
Australia’s F1 driver Mark Webber is now the 7-4 favourite for the world title with London bookmaker Ladbrokes with the season entering the final five rounds in Singapore this weekend.
At the start of the year he was 20-1.
Webber’s fortunes have turned around mightily since the dark days of continual mechanical breakdowns.
Australia may soon have its first F1 world champion in 30 years, since Alan Jones, but it’s hard to see even the euphoria that would trigger doing much to reverse the financial paralysis in his home event.
*Back Page Lead is a sports opinion website that provides sports content to Crikey.