The Australian Grand Prix, a traditional season opener for the Formula One season including this year, has suffered a huge blow following the race down-under posted a record $55 million loss amid soaring costs and declining revenue.
Sales revenue was down $2 million while expenditure was up $6.5 million, as what Victoria’s Major Events minister Louise Asher reported. The loss will be subsidised by taxpayers in the state of Victoria, just like the previous years. Last year, the organisers made $9 million dollars lost less than this year’s figure. Just recently, the organisers signed a new five year extension to host the race at Albert’s Park until 2020.
Critics and taxpayers have criticized the government for spending tax payers money for something irrelevant and wasteful. However, politicians from both major parties have long justified the costs on the claimed economic impact and branding effect the race has for the state. The government claims hundreds of job opportunities were created, together with financial benefits from earnings of advertising can be generated by having a race in the streets of Melbourne.
This brings us to the Malaysian Grand Prix, which will see its 17th and possible final race to be held in Sepang Int Circuit by 2015 based on the current contract. An article from CNN revealed that Malaysia pays $67 million per year to host a Grand Prix, and as claimed by this site, Bernie Ecclestone typically increases his prices by 7-10% per year. On that note, should we continue to pay the exorbitant hosting fees to host the pinnacle of motorsports in the years to come? Tell us what you think in the comments below!
[Source: Reuters]
