7 replies to this topic

[shaggy]

According to this link, the Australian GP cost $42.5M to stage :

http://f1racing.net/news.php?ID=65141

Now, is that average for all other GPs ? How much of that is just the fee paid to F1 ?

The community as a whole may win, the GP brought in $120M in revenue, but the track itself lost $7.5M. This really does cost a lot of money and I doubt all those reports about a second GP in the US; who else in the US will be willing to invest all that money ? They don't even pay that much for a Nacar race !!

Without government assistance, it appears that more races will be going to developing nations that do get help from taxpayers (whether they want to or not).

shaggy

[pRy]

I think the Australian GP is unique in that the race is held on public roads and a car park. But I think any loss is not a major issue for Australia because the tourism element alone must be huge, with Albert Park itself being 10 minutes walk from the center of the city. I guess the main cost is having to erect all the stands every year and also any track work that needs to be carried out due to the circuit being public the rest of the year. An intresting race to compare it with would I guess be Monaco... but with the celeb factor there, I'm sure they make the cost back on boat parking tickets alone.

[Ross Stonefeld]

And Monaco controls its own trackside advertising, whereas for the other races its controlled by a seperate company outside the race organiser

[KenC]

Originally posted by shaggy
According to this link, the Australian GP cost $42.5M to stage :

http://f1racing.net/news.php?ID=65141

Now, is that average for all other GPs ? How much of that is just the fee paid to F1 ?

The community as a whole may win, the GP brought in $120M in revenue, but the track itself lost $7.5M. This really does cost a lot of money and I doubt all those reports about a second GP in the US; who else in the US will be willing to invest all that money ? They don't even pay that much for a Nacar race !!

Without government assistance, it appears that more races will be going to developing nations that do get help from taxpayers (whether they want to or not).
shaggy

There has been an on-going battle with the community that uses Albert Park, as they've delved into the finances of the AusGP since it moved to Albert Park. You can try a Google search for their webpage. Haven't been there in years, but the artices and studies on the economic impact are interesting reading, as the tourism effect certainly seems overblown.

Okay, just Google'd:
http://www.save-albert-park.org.au/

At least the cost of hosting the GP has dropped to $42MM, because my memory was that it initially cost around $56MM. BTW, were those figs in Aussie dollars?

As for bringing an estimated $120MM in revenue to the state of Victoria, I can say that's not the incremental revenue. To be a totally fair comparison, one has to net out the normal tourism revenue generated, or the tourism dollars lost by people displaced by the GP weekend. When you do that, the actual benefit is much smaller. And, that doesn't even mention that one should take the tax implications of the $120MM in revenue, to determine the actual benefit to the state of Victoria.

The truth of the matter is, these reports typically conclude that there are immeasurable benefits to tourism thru exposure during the GP. Of course, when you think of the AusGP, do you think of the state of Victoria? No, not at all. Of course, the taxpayers who are subsidizing the race are only from the state of Victoria, and not the whole country of Australia. It doesn't take a big survey to realize that nary a soul thinks one second about the additional exposure for the state of Victoria.

As for the track fee, my recollection was that it was around $12MM. And, you are right, Bernie is trying to get gov'ts to subsidize tracks, even the Brit GP. And, the costs, are related to turning the Park into a track and back, as it is a temporary facitlity.

[BRNDLL]

I have to think that there is too many variables to actually quantify the total from venue to venue.
Australia doesnt have a permanent circuit but Indy does for example... Cost's get defrayed when you are talking a venue that can support several "support" events in the leadup and over the weekend. Just a thought.

bb

[shaggy]

It is true that the cost of building the track has to be higer than at other "permanent" locations, but, it is quite high nevertheless.

All this talk about revenue to the cities that hold sporting events reminds me of a discussion a few years ago on baseball teams. Apparently, when a city wants to bring a baseball or American football team, the point is always made about the revenue in tourism or restaurants, etc., that will be generated. There was a book written by an Economist who contradicted this belief and showed evidence that, usually, the city losses on all of these deals. The winners are the developers and bankers, the lossers are the taxpayers and the common folk. I am not too sure about the details, and there were numerous arguments pro and con, but the same story is being repeated in Australia.

It would be interesting to see a report on all the costs of the GPs. Australia and Iny are on the losing end; I would imagine the British and Brasilian GPs are also losers (without tobacco, teh Canadian GP would also be a loser). A lot of money is being traded among a very small group of already filthy rich individuals.

shaggy

[Derbris]

Only 42 mill? I should host one in my backyard!

[Riker!]

Im sure Adelaide would pay $42mil in a blink of a eye ;)