MOTORSPORT: Australian GP stays, questions remain

Four months ago it was ‘not what we paid for’; now it’s locked in long-term. Formula One racing will continue at Melbourne's Albert Park track until at least 2020.

In a secret deal agreed in London last week, the Victorian government has extended its contract to host an F1 grand prix for another five years beyond its 20th event at Melbourne’s Albert Park street circuit on March 15 next year.

The parties have not revealed the terms – although Victorian premier Denis Napthine and his tourism and major events minister Louise Asher claim the terms are better than under the existing deal. Asher said the worldwide telecast of the race “delivers invaluable promotion and coverage to Melbourne and Victoria”.

The pair painted the deal as having been done with private equity company CVC, owner of the biggest stake in the F1 business, rather than the sport’s long-time 83-year-old commercial supremo Bernie Ecclestone. However, the government’s media release quoted Ecclestone saying: “I congratulate Melbourne for the way in which it presents F1 to the world.”

Napthine praised Australian GP Corporation chairman Ron Walker for negotiating the contract extension, calling him “a tough negotiator” who had “got the best deal for Victoria”.

Walker boasts a close friendship with Ecclestone. He also is a former chairman of the Fairfax media group, although – as has become the custom – the news was leaked to rival News Ltd’s Melbourne tabloid Herald Sun in advance of Sunday morning’s announcement.

The Sunday Herald Sun’s report put a price of $250 million on the five-year contract extension. The event already has been costing Victorian taxpayers more than $50 million annually for several years.

However, that initial newspaper report, the government’s subsequent official announcement and other media coverage has overlooked at least three pertinent factors. These are that: Walker and AGPC chief executive Andrew Westacott have led very public protests about this year’s new, quieter “greener” hybrid F1 cars; Ecclestone himself is in the midst of a toxic criminal trial in Germany; and, Montreal (Canada), for one, has re-signed its F1 race for around 40 per cent of what Melbourne paid.

Nothing has changed that will address AGPC's very protests about this year’s new, quieter F1 cars. Walker said during this year’s season-opening Melbourne show that “it’s not what we paid for … it’s clearly in breach of our contract”.

The AGPC chair added: “We are an entertainment company and we have to entertain the public. When you take the excitement away you have trouble selling tickets. You have to create demand and part of that demand is people liking the noise of the race cars.”

Two months later, at the Spanish GP, Walker called the quieter cars “a disgrace”.

Meantime, Ecclestone's criminal trial in Germany for alleged bribery of a banker, already jailed, with a US$44 million payment several years ago continues to cast a pall on F1.

Reuters news agency reported on Friday that Ecclestone is trying to have that case settled by paying US$100 million, seemingly having raised his offer from US$33.5 million earlier in the week. He denies any wrongdoing, claiming the banker, Gerhard Gribkowsky, had been blackmailing him and that the payment was to get him out of his hair.

One of Ecclestone’s lawyers has said the case is “extremely burdensome” to the ageing F1 impresario. Although some of Gribkowsky’s evidence does not stack up, Ecclestone could face up to 10 years in jail if convicted.

But it's perhaps the monies paid to F1 that will be the talking point of the F1 extension – and the hardest sell the Victorian Government faces ahead of a state election in November.

While Victorian governments of both political persuasions have always refused to reveal the amount of the sanction fees they pay F1 for the race, Montreal (host of the Canadian GP and venue of Australian Daniel Ricciardo’s first F1 victory two months ago) revealed all when it signed its recent 10-year contract extension.

The Canadian city's C$187 million deal for the decade is just 40 per cent of the annualised price the Herald Sun has put on Melbourne’s new five-year deal.

-- with staff