October 26, 2021 | By Graeme Kemlo | Image: Australian Formula One Grand Prix

News that Sydney is readying a $200 million bid to pinch the Formula One Grand Prix in 2026 from Melbourne – who pinched it from Adelaide in 1996 – has provoked a strong reaction from Australian Grand Prix Corporation CEO Andrew Westacott who declared “it isn’t going anywhere”.

He cited Melbourne’s 25-year relationship with Formula One, “which is as strong as it has ever been” and suggested that with Melbourne’s strong line-up of major events and Brisbane’s successful Olympic Games bid that “Sydney is going to go after major events…but they have got to do their due diligence”.

The Melbourne F1 Grand Prix has been controversial since the “major events capital of the world” stole it from Adelaide to showcase the city to a global TV audience of up to 400 million.

One of the controversial aspects of the event is the actual cost of subsidising it from the public purse, revealed in the 186-page annual report of the Australian Grand Prix Corporation, which in 2019 had revenues of $56 million and expenditure of $115 million, and noted that the “government investment” was $60.153 million. Even more controversial is the annual licence fee confidentially negotiated with F1 boss Bernie Ecclestone and now believed to be up to $30 million a year.

Melbourne’s annual collection of major events – the upcoming Melbourne Cup and Spring Racing Carnival, Motorcycle GP, the Boxing Day test cricket,  Australian Open tennis,  AFL Grand Final and the F1 GP set for Albert Park in April 2022 can draw hundreds of thousands of spectators: local, interstate and normally international visitors.

Having not staged the Albert Park F1 event since 2019 due to COVID there are those in Melbourne who will say, “let Sydney take it”.  The “Save Albert Park” group have been tying yellow ribbons to the park’s trees since day one, but there are others who have put up with the daily dislocation for up to three months during the erection and dismantling of the street circuit.

I count myself among those, with offices in Queens Road/St Kilda Road who simply put up with disruptions to my daily commute from the south into the city; the sound of the F1 cars practising next door is exhilarating. But there are hundreds of daily users of this public park unable to access sports grounds or waters – rowers, yachties, runners, walkers and nature lovers who notice the absence of birdlife.

While the race is a cornerstone event for Melbourne because it helps fill the hotels and restaurants, mainly large business events operators benefit directly from the event.

Successive Victorian governments of both persuasions have renewed the F1 deal. Most recently Minister for Tourism, Sport and Major Events Martin Pakula, who announced in July 2019 Melbourne would stage the event through to 2025, said: “The event provides a major boost to the Victorian economy with CBD hotels at 94 percent occupancy during Grand Prix week and benefits flowing through the hospitality and tourism sectors.

“Major events generate an estimated $1.8 billion of economic benefit annually for Victoria, supporting 4,700 full-time equivalent jobs.”

But in a period when climate change is a major focus, perhaps triple bottom line accounting, which examines the impact of economic, social and environmental issues not just economic benefit, may play a role in deciding what happens after 2025 in Melbourne.