Australian GP has to avoid chequered flag
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Embattled organizers of Australia's loss-making F1 Grand Prix are likely to be among Mark Webber's biggest cheerleaders at Albert Park on Sunday, hoping a win for the local favorite offers a welcome distraction from growing acrimony over the race's cost to taxpayers.
Webber's breakthrough third season with Red Bull helped draw more than 300,000 to the Melbourne street circuit last year, the race's biggest crowd in years.
In the end, local fans, Webber and government officials were all disappointed. Webber crashed to ninth and the race posted a A$49.2 million ($49.5 million) loss, up A$9 million on the previous year and the highest in the Melbourne race's history.
Unlike the 34-year-old Australian driver's chances, few hold any hope of a better financial result in the Grand Prix's 16th year in Melbourne, which remains yoked to Formula One until the current lease expires in 2015.
"When the loss is now A$50 million and talk of it going to A$70 million, people are paying more attention and obviously it's providing a bit more ammunition for those who have long opposed the event," said Geoffrey Harris, a journalist and former media manager for the Australian Grand Prix Corporation (AGPC), the race's organizers.
"While I am sure they are doing all they can to contain cost increases, the revenues certainly haven't been going up," Harris said.
"So if you didn't have a government standing behind it, you certainly wouldn't be able to maintain a business on that footing."
Melbourne's Grand Prix has accumulated more than A$250 million in losses since its 1996 debut, and revenues have slumped by more than a third in the past five years as costs have risen.
The growing fiscal black hole has prompted politicians to question the race's value to the city and its home state of Victoria, where successive governments have made securing major events central to policy.
Blame game
The city's Lord Mayor, Robert Doyle, called time on the race in an editorial in a local tabloid in January, while Michael Danby, a federal lawmaker whose district incorporates the Albert Park circuit, told parliament last month his constituents were overwhelmingly against the race continuing.
Victoria's newly-elected Liberal Party-led government has put much of the blame on the previous Labor leadership for agreeing to pay steep license fees to Bernie Ecclestone's Formula One management company to secure the race in Melbourne.
"We've inherited a contract that Labor's signed up to, and I just have to deal with it, so my opinion of what might be an acceptable loss is irrelevant because the event is contracted until 2015, so what we're trying to do is manage what we've inherited," Louise Asher, Victoria's minister for major events and tourism, said.
Harris, who resigned from the AGPC in 2005, said accountability should rather remain with the organizers' board for negotiating the license fees, which local media estimate at up to A$25 million per year.
"The chief executives have changed and there's been turnover in staff over the years, but certainly there's only been one chairman throughout the duration," said Harris, referring to 81-year-old local businessman Ron Walker, a former mayor of Melbourne and Liberal Party luminary.
"There's been one chairman in the middle who I would have thought was acting for Victoria, whatever the persuasion of the government.
"Clearly the government doesn't know too much about the nature of this business anyway ... if it were a public company, it would have been hard to imagine there wouldn't have been a lot more scrutiny."
Walker, a long-time friend of Ecclestone, told local media last week the "wretched" license fees could see Melbourne forced to give up the race.
"Revenue has started to fall for reasons we never ever worked out," Walker said.
The state government has placed pressure on the AGPC to cut costs, leading to the abandonment of big international music acts for entertainment and more competitive tendering, according to CEO Andrew Westacott.
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