Melbourne wants to renegotiate its contract downwards after 2015
As Singapore has just secured a reduction in its contract for the editions between 2013 and 2017, the government of the State of Victoria also wants to lower its bill after 2015, the year when its current contract ends.
This is not the first time local authorities have declared that the bill left to Melbourne taxpayers is deemed too high. In January 2011, Robert Doyle, the city’s mayor, stated: “The Grand Prix has been a very good thing for Melbourne and the State of Victoria, but we expect the Grand Prix to perform better financially, and we will make sure that it does.”
This time, the same criticism comes from a higher level in the local authorities’ hierarchy since it comes from Louise Asher, the State’s Minister of Tourism. She stated to the newspaper The Age: « I would very much like to keep the race beyond the 2015 contract, but the contract we are going to discuss must provide value for the taxpayers, and I am not comfortable with this level of subsidies. You can reasonably expect that without further budget cuts from the Australian Grand Prix Corporation, the subsidies will increase again. » Like Silverstone, Melbourne indeed has an annual fee increase clause payable to Bernie Ecclestone, which can only increase the burden on taxpayers, despite the increased capacity decreed during the 2012 event.
It must be said that the subsidies have already increased significantly as they were 50 million Australian dollars in 2010 but have now reached 56 million, representing a slippage increase of 12% in two years. This is therefore incomparable with the public subsidy of 6.58 million Australian dollars, granted to the MotoGP Grand Prix, which takes place in Philip Island. But if Bernie Ecclestone is an expert in manipulating journalists to achieve his goals, politicians have nothing to envy him. Indeed, Louise Asher’s statement is part of a logic of criticizing the previous government, as can be seen through the following comment: « The Brumby Labor government signed a contract too costly for the taxpayer, in my opinion. It’s a very, very expensive race, and I am personally not happy with this level of subsidies. »
According to Peter Logan, the spokesperson for the Save Albert Park group: « It’s a business model that has failed: all the other events held in Melbourne are run by people who know what they are doing, with very little subsidies for specifically built structures. The Grand Prix is managed by the government on the most expensive model you can invent, and that’s why it costs so much. Additionally, it is a secret contract. »
Nevertheless, there is very little chance that Bernie Ecclestone will sit around the table to negotiate a reduction when he is assured of having an increase in his revenue over the next three seasons.
With the participation of www.Racingbusiness.fr
