The cancellation of the Australian Grand Prix cost 25 million euros
The 2020 Australian Grand Prix was literally canceled just before the start of the free practice sessions. This last-minute cancellation left the State of Victoria with a €25 million bill.
Last March, the start of the season turned into a fiasco as the Australian Grand Prix was canceled on Friday morning after McLaren decided to withdraw due to a positive case in their team. Since the circuit is temporary, this forces organizers to face significant construction costs. Thus, every year, no less than 21 million euros are invested to create all the infrastructure in the heart of Albert Park. Other costs could not be recovered either, such as advertising (4 million euros) or even catering expenses (3 million). Moreover, this latter resource was repurposed for a good cause as all the food was distributed to the city’s charities.
Conversely, the cancellation of the race led to the refund of all tickets to the fans who had planned to attend. This is all the more regrettable for the promoters since the numbers were up compared to 2019, which had been the best year since 2005 in terms of spectator numbers.
A significant source of income came from consulting fees charged to the organizers of the Vietnam Grand Prix, which was supposed to debut on the calendar. However, it was also canceled and no longer appears on the 2021 calendar as its promoter is currently imprisoned for corruption. This collaboration also served as a networking platform to allow local businesses to be involved in organizing the Southeast Asian race.
If Liberty Media canceled the organization fees, the bill remains substantial for the State of Victoria since the local contribution reaches 25 million euros. Paradoxically, this public funding is significantly lower compared to previous seasons, given that it was 38 million euros in 2016 and 2019, and 36 million in 2018.
If local governments accept this contribution, it is because these events help showcase the city and the state, notably with an influx of spectators from other cities and countries in the region, which results in benefits for local businesses (hotels, restaurants, bars, souvenirs…).
With the participation of RacingBusiness
