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Australian GP suffers $34m loss

NEWS STORY
31/10/2007

The Victoria parliament has revealed that the 2007 Australian GP in Melbourne saw a loss of $34.6m (15.4m), a considerable increase on the $21m (8.2m) loss in 2006 and the $13m (5.1m) in 2005.

According to a report tabled in state parliament today, the 2007 event cost $78m (34.7m) to run, with the revenue dropping $4.1m (1.8m) on last year. The Victorian government has to make up the $34.6m shortfall.

The loss is manly attributed to poor ticket sales - despite numerous incentive schemes - and low sponsorship revenue.

The news has led to a political row with the Victoria government being accused of being unable to handle such large scale events.

"The state government can't manage these important events and important icons for Victoria," said opposition spokesman David Davis, according to the Sydney Morning Herald. "These events should be returning big dividends for Victoria, they should be able to be pulling in tourists, getting the results that Victorians need, the results for Victoria's economy. Instead of that, we've seen them propped up by the government and making significant losses."

Another event that lost money this year, according to the Victoria parliament, was the FINA world championships (swimming), which lost $11m (4.9m) against an outlay of 50m (22.2m). However, on the back of revenue gains in previous years the event recorded an overall surplus of $536,000 ($238,000).

In June 2006 , the Victorian state government approved as much as $52m Au (23m) over the next four years in an attempt not only to bring new sporting events to the state but to retain existing events such as the Grand Prix.

Note: All $ figures relate to Australian dollars.

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