The future of the Australian Grand Prix

Every year during the Australian Grand Prix weekend there is widespread speculation about the future of the event at Albert Park. Local political opposition to the Grand Prix grows as the cost of hosting the race steadily increases. There is a Formula One contract in place for Albert Park until 2015 but the future of the Australian Grand Prix beyond that is uncertain.

Since the first race in Melbourne the annual fee paid to Formula One Management has grown from $8million to $25million. Simultaneously, the revenue generated by the Australian Grand Prix Corporation has been gradually falling resulting in a larger net loss to the Government. Although there are many economic advantages to hosting a Grand Prix, it is understandably becoming harder for local politicians to justify the spiralling cost to taxpayers. Last week, one Member of Parliament made the amusing observation that Victoria’s Government is effectively funding the lavish lifestyle of Bernie Ecclestone’s spoilt daughters when there are local schools and health programs in desperate need of cash. He may have been ignoring some of the benefits that come from the Grand Prix, but his argument is still a good one.

The cost of the race in Melbourne is magnified by the incredible expense that goes into building the temporary circuit each year. One look at Albert Park without the Grand Prix infrastructure in place shows how much work goes into construction alone. The entire venue is built from scratch and pulled down again each and every year.

On Sunday, a story in the Sydney press reported that Melbourne might start sharing the Grand Prix with another Australian city when the existing contract expires in 2015. This idea has since been shot down by the very influential Grand Prix Chairman, Ron Walker, as well as the Victorian Premier who rightly suggested it would actually be more expensive to run the event that way. However, the pressure on Melbourne to keep the race will intensify up until the end of the existing contract.

In the past has detailed a number of alternative Australian Grand Prix venues, including a race at Eastern Creek in Sydney and Phillip Island to the south of Melbourne. We have also suggested a few reasons why Perth would be a very suitable venue for the sport. However, despite the massive enthusiasm for Formula One in Australia there are very few alternatives to a Grand Prix at Albert Park. There have been a significant number of proposals over the last five years but few of them have proven to be suitable.

Avalon Airport – Melbourne

In addition to a short-lived and ridiculous suggestion to move the Australian Grand Prix to Flemington Racecourse in Melbourne, there was a serious proposal in 2010 to build a permanent Grand Prix circuit on land at Avalon Airport, roughly 50 kilometres from Melbourne city. The Confederation of Australian Motor Sport launched a feasibility study into such an idea and the plan received a boost last year when Ron Walker said “If you did that, and the government builds a line to Avalon Airport, there are 3000 hectares out there, then it could work for us on a permanent basis.”

It is the most likely alternative to Albert Park.

Avalon Airport is owned by the wealthy Linfox Corporation who have openly said they will fund the construction of any Formula One circuit to negate the cost to taxpayers. Ron Walker’s wish for the Government to construct a rail line to the airport will also come true in 2016, conveniently one year after the Albert Park contract expires.

The airport is some distance from the city but is still capable of attracting large crowds. Every two years it hosts the Australian International Airshow which drew 195,000 spectators in 2011. The addition of a rail line would make it far more accessible.

Flying there certainly isn’t a problem 🙂

Amusingly, despite showing his support twelve months ago, Ron Walker has since shot down the idea of moving the Grand Prix to Avalon saying “There’s a number of people who suggested that the government builds a permanent track. If you do that, the silhouette of the city, which is a great advertisement, would merely be a haze in the distance. I think we are doing very well in the way we are”.

Although fickle in his opinion, Ron makes a good point. Avalon is a great location if you want to accommodate night racing and remove the annual expense of constructing a temporary circuit, but it’s not so great if you want an attractive venue that encourages tourism on a wider scale.

Homebush Bay Street Circuit – Sydney

The popular V8 Supercar series began using a street circuit around Sydney’s old Olympic precinct in 2009. The event has proven to be hugely successful and last year drew a weekend crowd of 172,000 spectators. In March 2010 the New South Wales Government suggested this new flagship event for the city could be transformed into a Formula One Grand Prix and even contacted F1 bosses about the possibility. The state’s Major Events Minister, Ian Macdonald, said “I’ve already started to make contact with the F1 promoters. We’re already having a good look at the facilities and infrastructure that we have available for such an event. They can rest assured down in Melbourne that they’re going to have a hard time. They haven’t got this event to themselves. They’re complacent, they’re somewhat arrogant and we believe we can offer a night grand prix, which is something the promoters we know need to service their European viewership.”

Nothing concrete has emerged from those words in 2010 and a change of Government in New South Wales seems to ensure that nothing ever will.

The Homebush Bay Street Circuit is barely suitable for touring cars let alone Formula One. As well as being a mindlessly boring square with a few chicanes, it is short and dangerously narrow in places. It wouldn’t be easy to make alterations given the severe restrictions on the surrounding land. The Government was accused of breaking local environmental laws when the circuit was first constructed so would face an uphill battle turning it into a larger venue. There is not a lot of scope to create a longer more suitable track, but even if a solution could be found, the cost would be meteoric.

A Formula One night race at Homebush would have been perfect if such an idea had been considered when the entire area was developed for the Sydney Olympics. Sadly, it would seem too late to integrate a Grand Prix circuit now.

IMETT Circuit – Brisbane

IMETT stands for Integrated Motorsport Education Tourism and Technology and is the name of a company hoping to build a massive motorsport facility in South East Queensland. Their plans to construct a Herman Tilke designed F1 circuit (that would also act as a base for the WRC) went through three years of Government approval before being rejected in December 2010. The area is rich farming land and the local authorities are rightly hesitant to give this way for more industrial purposes. There is also some doubt around the funding and long term sustainability of the facility.

Investors are still hoping to go ahead with their plan to build a Sepang-esque venue and will resubmit their proposal to the Government, although it no longer has “significant project” status and will continue to face stiff opposition.

If the resubmitted proposal is surprisingly approved, and money is found to construct the circuit, it could be a possible alternative to Albert Park. It is serviced by major roads and public transport, is closer to Brisbane than Avalon is to Melbourne, and would run the Grand Prix at night. Nothing has been heard from the company in twelve months so it seems their multipurpose motorsport facility will sink without a trace, but there is a very slim chance it might just resurface in time for the 2016 Australian Grand Prix.

The future of the Australian Grand Prix

The Australian Grand Prix is one of the strongest and most popular events in Formula One. It helps to define a ‘world’ championship and is a glowing example of a well organised race. The event is also good for Melbourne. In addition to economic boost provided by the many interstate and overseas visitors, Formula One provides fantastic global branding for the city. Not only does that increase tourism long-term, but big events like the Grand Prix make it more likely that more prolific smaller events will also be attracted to the city.

The only real issue with Albert Park is the cost. Environmental and residential concerns about the race have been conquered, and although some people claim the F1 novelty is wearing off, crowd numbers continue to be strong.

If the Grand Prix Corporation can successfully convince the taxpayers of Victoria that running a Formula One race in Albert Park is good value for money the event will continue there well beyond 2015. There aren’t a lot of alternatives.

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