F1 hosting costs - do we have the balance right vs grassroots motorsports funding support and should there be a coordinated pushback against Liberty Media’s financial objective?
Last Friday I had the opportunity to spend all day at the Australian Grand Prix with my youngest child (19). We only had general admission tickets - so, no grandstand seating for us (I’ve done that previously and the cost is now eye-watering). Despite it just being practice day, it’s a sellout. There’s people at the gate begging to buy our basic GA tickets. Nope, we didn’t sell.
The weather is stunning. The place is buzzing with people. Great atmosphere. And despite the hordes of people (over 120,000) we still manage to get some outstanding trackside viewing just metres from the circuit (particularly T13). Absolutely no complaints - we had a super time. As for the rest of the weekend, it was perhaps the most successful race meet to date in Melbourne. Sensational weather for the weekend, more sellout crowds (about 450,000 went over the three days) and circa 40% event participation by women.
So, what’s the problem? Well, let’s talk about cost, where the money comes from, hosting fees, and diversion of hard earned taxpayer funds from other endeavours, including grassroots motorsports. Do we have the balance right?
Now, I can’t talk to any other jurisdiction in the same way I can about Australia. I’ll leave that to others. Moreover, it really shouldn’t be called the Australian Grand Prix. Rather it should be called the Victorian Grand Prix, my home state, because it is Victorian tax payers who are copping the bill. As we have since 1996. And now with a new “deal” (read being screwed) with Liberty, for the next 14 years.
Because the Victorian taxpayer is footing the bill and owns the event organiser, and despite “commercial in confidence” handwaving by the event organisers, we do get access to some basic revenue and cost information. Below is a the latest graph in the public domain detailing the Victorian taxpayer subsidy over time. It started bad, has got much worse despite a recent surge in revenue, and is likely to get (materially) worse (particularly if you have some insight into the “deal” that the Victorian Government has just struck with Liberty).
Now, I’m not for a moment suggesting there are not a whole lot of downstream and upstream economic multipliers/benefits. There are. There is no doubt the Victorian economy gets a big boost. Plus, there’s all the longer term promotional benefits. But, is it value for money? Is the balance right? Are we just bidding against other great hosting cities to the benefit of Liberty shareholders and are diverting funds from grassroots motorsports where the economic benefits could be higher again (particularly in regional areas)? Alternatively, is Liberty doing the right thing by grassroots motor sports, on-track female participation, etc, and reinvesting its take for the greater good? Do they have a societal obligation as well if they are taking from the public purse?
I’m far from convinced and think we need to push back. Of course I want F1 to stay in Melbourne. But, a AU$100 million cheque per annum (US$65 million) and growing (from 2023) is one hell of an “investment”. Imagine if just 30% of that pool was being ploughed back into your regional motorsports. Thoughts?