‘Guard it jealously’: Grand Prix boss defends $100 million per year cost

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“There’s also an element of city and civic pride that comes with being the only city on earth that has a Formula 1 grand prix and a [tennis] grand slam and it’s something that we should guard very jealously.”

Shadow minister for tourism, sport, events and hospitality Sam Groth told this masthead the grand prix “can’t continue to run at a more than $100 million loss each year.

“Victoria needs well-managed and financially sustainable major events to ensure the economic benefits of events like the Aus GP can continue into the future,” Groth said.

“The AGPC needs greater ministerial scrutiny over its spending and must represent good value for taxpayer’s money. The Allan Government needs to find ways to further leverage the grand prix across the entire year and not just the four days of the event.”

Pakula was adamant the AGPC was doing everything it could to increase revenue and reduce costs.

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“The reality is, when you want to be in the business of running an F1 event, there’s a cost involved,” Pakula said in an interview with this masthead.

“The economic return is substantially greater than the cost to the taxpayer and if we didn’t want this event then there would be jurisdictions lining up to take our place, including one to the near north,” he said.

“There are inherent costs not just in the licence fee but also in the fact that every year we have to build the circuit from scratch. There are some costs that are very hard to avoid. But your readers should be absolutely assured that we have been looking for every opportunity to ameliorate the costs whenever we can and increase the revenue whereever we can.”

Pakula said there were high expectations for Melbourne to compete with the other big Formula 1 and sporting events around the world, not just with the motor sport spectacle but with food, music and fashion.

This masthead reported that LIV Golf paid two Australian DJs a combined $2.6 million to perform at last month’s Adelaide event.

The same performers, Fisher and Melburnian Dom Dolla, were approached by the AGPC, but their asking price blew organisers out of the water.

“The truth is, musical acts these days cost more than they have ever cost before. We’ve got a number of, I think, really good musical acts playing this year at the race,” Pakula said.

“We did look at whether you can have a stand alone, separately ticketed musical act on the Thursday, but the truth is, and I suspect events are probably all driving one another’s costs up in terms of attracting musical acts, to find that sweet spot where the amount you’d have to pay for the act and the amount you’d have to charge for a ticket to make that work, I think is becoming increasingly difficult.

“It’s easier if you’re dealing with [Saudi] gulf oil money, but that’s not the case for an event like ours.”

Despite a small price hike for an average ticket – a general admission pass on Sunday is $169 compared with $149 last year – tickets for Friday, Saturday and Sunday sold out in three hours.

Daily capacity has been increased from 130,000 to 135,000 people.

With Formula 1’s rise in global popularity over the past decade, thanks in large part to the success of Netflix’s docuseries Drive to Survive, Pakula suggested the Australian Grand Prix could rival other sporting events as a jewel in Australia’s sporting crown.

“To occupy that place in the public imagination is … not easy to do, particularly for an event that runs for four days as opposed to seven months. But, I think as a standalone event, a standalone weekend, I think the Formula 1 grand prix sits very comfortably alongside anything, including the AFL Grand Final.”