Have We Run Our Race?

The Age

Saturday February 9, 2008

Ben Doherty and Josh Gordon - Ben Doherty is a staff reporter. Josh Gordon is state economics reporter

Since 1996, Victorians have loved and loathed the annual formula one extravaganza at Albert Park. But as audiences shrink and costs rise, its value to the state is up for reassessment.

BERNIE Ecclestone is notorious for being late. Meetings are regularly postponed by hours, or cancelled altogether, as the diminutive formula one tsar crisscrosses the globe tending to his empire. So as John Konrads waited for a scheduled 9am meeting at Ecclestone's London office one day in September 1992, with a 1pm flight back to Australia, he grew nervous. He would wait, he told himself, no later than 11am.

Konrads, the former Olympic champion and then head of Melbourne Major Events, had stopped in to see "Bernie" - as he is known - to discuss the possibility of Melbourne snatching the Australian formula one Grand Prix from Adelaide.

He wasn't especially confident. The race had been Adelaide's for nearly a decade and Ecclestone was a close friend of the then South Australian premier, John Bannon, who had brought the race to Australia.

"But Bernie hadn't cancelled the meeting, so I thought that was a start," he says.

And then, on the stroke of nine o'clock, there was Ecclestone. All smiles and handshakes and "how are yous" (the pair had been previously acquainted through Konrads' former job with Ansett).

Speaking with The Age this week, Konrads remembers thinking: "Why is this man being so nice, so eager?"

But the ground had shifted. That morning, back in Australia, Bannon had resigned. Konrads didn't know, but Ecclestone did. He sensed the change in mood in South Australia. Perhaps, he figured, it was time to move the race on.

"John Bannon, who was a friend of Bernie's, was gone," says Konrads, "and he didn't have confidence in the other people running the race in Adelaide to come up with more money."

The rest, as they say, is history. Melbourne won the right to host the race. The agreement was sealed with a handshake between Ecclestone and new Victorian premier Jeff Kennett.

But is history about to repeat itself? Has Melbourne's grand prix reached the end of its shelf life? And is Victoria set to lose the event to another hungry bidder when the contract to host the race expires in 2010?

With Ecclestone at odds with the Victorian Government and race organisers over his demands for them to spend $60 million floodlighting the track, he said this week there was little chance Melbourne's contract would be renewed.

Some think he is bluffing. But others believe the race may have run its course. Internationally, only half the 18 grands prix have been at their current location longer than Melbourne has had its. Adelaide held 10 grands prix. Melbourne, by 2010, will have run 15. The parallels between South Australia circa 1992 and Victoria 2008 are striking. Political support appears to be waning after one Labor premier stepped aside for another. Public support is also flagging. From a record attendance of 401,000 in 1996, numbers slumped to a low of just 301,000 in 2007. Adelaide's numbers took a similar dive in its last years, save for a record farewell crowd.

Many Melburnians resent the inconvenience of the race and its impost on the public purse, complaints similar to those heard in Adelaide before it lost the race.

And other cities are circling. Russian President Vladimir Putin has met Ecclestone, lobbying for a race in St Petersburg.

It seems a world away from that September morning in London in 1992. Back then, Victoria's coup, incredibly, was kept secret for 18 months, even as the machinations to host the race at Albert Park got under way. To this day, the amount of money Victoria promised Ecclestone remains a mystery. The contract is out of the country. But Konrads still has the envelope on which he drew up the budget for Melbourne's first F1. It was somewhere around $250,000.

Even then, it was a stretch for a new government. Konrads remembers Alan Stockdale, then treasurer, saying: "I guess a few potholes in Box Hill will have to stay there a little longer."

The potholes may well still be there, but the first race - held on March 10, 1996, at Albert Park - was a roaring success. Kennett launched the event wearing a famously flamboyant checked suit, and more than 400,000 people turned up, an attendance that has never been bettered.

"It had a very major psychological effect," Kennett said this week, claiming it lifted the state from its depression over the State Bank and Pyramid failures, low economic activity and high unemployment.

Victoria and, more famously, Melbourne have been wooing and winning special events ever since. But is this one worth it?

Money has always been the issue. There's no shortage of it in F1 circles, but Australia has always been the poor cousin to its advertising-rich European rivals.

Meanwhile, the cost of the race to Victorian taxpayers grows every year, and is tipped to top $40 million this year. Attendances are in steady decline.

With Ecclestone insisting the race be run at night to accommodate world television audiences, but the Government and race organisers refusing to take on the $60 million-odd price tag to floodlight the track, the race's future appears in jeopardy.

"Our costs are very high in Australia and we get a lot less money. It's bloody bad for us," Ecclestone said this week. "We've got quite a few places on the list which would like to have F1, and as it seems your guy down there (Premier John Brumby) doesn't want F1, we can make him happy and make the other people happy."

He said a night race was Melbourne's "only option" if it wanted to keep the race.

Race organisers and the Government seem unwilling to oblige. "There will not be a night race," Ron Walker, chairman of the Australian Grand Prix - and of Fairfax Media, owner of The Age - said this week.

Tourism Minister Tim Holding was equally adamant. "We've made it clear that we wouldn't have a night race."

Both have raised the possibility that Melbourne's time as a grand prix host is coming to an end. "We don't want to lose it, but we don't want to pay any price for it either," Holding said. "It's a balance."

Walker said spending $60 million to floodlight Albert Park was not feasible. "If it's all about money, then clearly Melbourne will lose the race," he said. "There comes a time when you can't afford to pay these huge amounts of money for these events. The Government has a responsibility to taxpayers.

"Maybe it's, you know, ended its usefulness to the state of Victoria, and we should move on, but there are very few events that you can get on an annual basis that produce the publicity for Victoria as the grand prix."

Konrads told The Age all options should be considered to keep the race in Melbourne but conceded he was not confident a resolution could be found. "I think the Government should do everything it can to keep it. I think it's an important event, but to me it doesn't look saveable.

"There's a time for everything and maybe we just need to relax and accept it, say, 'We've had a good innings since 1996 and Melbourne is a better city for having had the event.' "

Walker suggested that Ecclestone's comments were simply the first salvos in always-fiery negotiations over the race. But Konrads isn't so sure. "I don't think Bernie is bluffing. I think he is serious in what he says . . . there are bigger markets in China and in India he would like to pursue."

Kennett, the other major player in securing the grand prix for Melbourne, said the effect of losing it would reach far beyond the track. It would be "a very sad day for Victoria" if the grand prix were lost, he said.

"I can't help but think if you lose the grand prix, you substantially dint our reputation and you substantially reduce our international exposure and you reduce the levels of activity undertaken by all those who service the event."

Ben Doherty is a staff reporter.

Josh Gordon is state economics reporter.

© 2008 The Age

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