25/04/2012
NEWS STORY
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Mat Coch writes:
Attendance figures for this year's Australian Grand Prix were up on those from 2011 by more than 5%. There was more to do this year, and more to see. V8 Supercars were back on the support schedule, a key factor in making any Australian motor racing event successful, while a grandstand in the circuit's centre overlooked a motorcycle stunt show. There were a number of interactive exhibits to entertain the fans and the dancing girls were popular as usual, if not interactive in the family sense of the word.
The Australian Grand Prix Corporation has now suggested that the increase in attendance was not down to the extracurricular activities on offer. It wasn't even because of the fact Australia had two of its own on the gird for the first time. No, the AGPC suggests what really brought the punters in was the ability to pay a little extra to sit on a bean bag while drinking beer.
Over the weekend, as I travelled back and forth from the circuit, I was forced to walk from the paddock past Turn 15 towards the only gate left open for a weary journo on Fitzroy Street. It was a trek which meant traversing poorly lit roads, dirt paths, muddy banks and inquisitive security guards.
Atop one of those muddy knolls was what I assumed at the time to be a corporate area, though I've since learned it was in fact Albert Park's secret weapon.
It featured a small bar and some novel looking seats and, if memory serves, a canopy style roof covering part of it. It was not a large area, not one that could host 15,000 people, and looked only marginally more attractive than the wet grass on either side. The success of the Australian Grand Prix was therefore a decision between fans having wet backside or a hangover.
"General admission patrons could pay a premium on their ticket and receive A-grade viewing at Turn 15 including bean bags, deck chairs and their own bar… That's what drove attendance, and it was the best we've had since 2005," Andrew Westacott, chief executive of the Australian Grand Prix Corporation has gone on record as saying. And here was I thinking it was a semi-exposed muddy embankment overlooking the penultimate corner, hardly what one would describe as 'A-grade viewing'.
Westacott's comments are optimistic in the extreme and misguided at best. I suspect I'm not the only one to have raised an eyebrow at his remarks, and am left to wonder just what was said in the corridors of power at the Australian Grand Prix Corporation. I suspect it no longer has a surplus of the free ear plugs it so readily distributed over the Grand Prix weekend.
The problem is the Australian Grand Prix Corporation has been fighting a desperate battle to keep itself relevant in the face of ever mounting scepticism. It fights with a PR offensive, fighting in the face of public opinion and ridicule.
Key among detractor's arguments is the fact the race has lost money every year it's been held. The State Government and AGPC claim the event is not a cost but an investment - the same logical argument we all run through when buying a lottery ticket. Westacott's comments trivialise the efforts the Corporation has made to defend itself.
That Australian Grand Prix reaps rewards of 254%, according to Formula Money. It's a calculation based on the economic impact of the event against the cost of hosting it, which suggests Melbourne is well ahead.
Funnily enough the Save Albert Park protest group, which has fought tirelessly against the Grand Prix since 1996, also used Formula Money in producing its July 2011 report.
"This year's Australian Grand Prix shows the advertising value of "Melbourne" is only $250,000," the report read. "That is all taxpayers get for the hundreds of millions of dollars that have been sunk into the event. In fact, Formula Money shows "Melbourne" was one of the least noticed brands in the world television coverage of the event, coming in at 29th - a very poor return. This supports the Auditor-General's research that found no evidence the event brings in extra tourists to Melbourne and begs the question: has the government been hiding this information from Victorians?
"This last myth in the web of spin and deceit justifying the taxpayer funding of a temporary car race in a public park has been destroyed by Formula Money."
Over the race weekend a fellow Australian journo and I were talking and he raised an extremely good point. The Government's claim has been that the race, while making a loss, advertises the Melbourne brand to the wider world. My fellow journalist is Melbourne based and has worked in motor sport since I was in short trousers. What is the 'Melbourne' brand exactly, he asked? Where does one buy some Melbourne, or more to the point, why would we want to? How does the Grand Prix alone enhance that brand, and what direct and measurable benefits does it give the Victorian tax payers?
In 2009 the media brand exposure of Melbourne was $270,000 (£173,000). In 2010 Victorian tax payers funded the event to the tune of $49.2million (£31.6m). The economic impact to the state was estimated at $117m (£75.1m) for 2010, the 254% mentioned above, and yet an Auditor General investigation has found no evidence to back up that claim. The figure in Formula Money is an unbiased estimate, but one which has not been officially corroborated by the state of Victoria.
Last week's article also stated that revenue has risen from the event, though one is again left feeling that the full story is not being told. Figures from 2011 are still being calculated, we're told, and so we are basing those increased revenue assumptions on figures from 2010 and the fact attendance figures have risen. It may well be that revenue has gone up slightly, but so too has the race hosting fee payable to Formula One Management.
The article must therefore not be taken with a grain of salt, but the shaker itself. Westacott has dangerously over-simplified the rise in attendance and in doing so has sold the event short. While revenue may well be up - be patient, we'll know in another year or two - it's almost certain the event as a whole lost more than $50m.
That's a lot of bean bags.