MELBOURNE—The Australian Grand Prix is expected to lose $40 million this year as organisers fight to keep the embattled F1 event in Melbourne.
Australian Grand Prix chairman Ron Walker today hosed down speculation Melbourne was in danger of losing the big ticket race, amid speculation F1 bosses are scouting for more lucrative host cities offshore.
Victorian Premier John Brumby hinted late last year the event was in doubt if it became too expensive and licence fees rose.
Last year's race lost almost $35 million.
But Mr Walker today maintained the race was viable, saying the racing industry backed keeping it in Melbourne beyond the current 2010 contract.
He flatly rejected claims by F1 boss Bernie Ecclestone that teams and sponsors wanted the event axed from Melbourne and Mr Brumby had withdrawn his support.
"I don't agree with that at all, I speak to the teams regularly and they love coming to Melbourne, everybody loves coming to Melbourne," Mr Walker said.
"The Premier's been a great supporter of it, even in opposition ... but it has to add up in the eyes of the taxpayer."
Mr Walker predicted the Grand Prix would lose even more money this year, but said the losses must be balanced against the sport's economic benefits.
"It will probably cost 40 (million dollars) this year, but that's because of the high cost of constructing a street circuit in Albert Park," he said.
Mr Ecclestone is said to be chasing overseas hosts, which would attract more money, greater sponsorship and greater television audiences for the Grand Prix.
Australian motor racing chiefs considered hosting a night race to cash in on overseas audiences in a better timeslot, but the move was ruled out.
The race instead moved from 2pm to 3.30pm (AEDT), which Mr Walker said would attract tens of millions more television viewers.
"I think that that compromise has been well accepted by Mr Ecclestone, but at the same time I think this is just his first shot over the bow in his negotiations with the government on the renewal of the contract," Mr Walker said.
"All things have a used-by date sticker on them and maybe the Government might say ... it's time for a change, but we don't know yet.
"It's viable now because we have $135 million in economic benefit and we collect about $16 million in tax against a construction cost of $26 million, so it balances itself out."
Mr Walker said scrapping the event from Melbourne would cost the state millions of dollars and massive worldwide exposure.
The race was seen by 350 million people in 132 countries, he said.
Victorian Major Events and Tourism Minister Tim Holding said the grand prix would continue in Melbourne, provided it was in the state's best interest and represented value for money.
He said the event showcased Melbourne to the world and had spin-offs for the state economy.
"Any claim that the Government does not support this event is just plainly wrong," he said.
Mr Holding said the Melbourne Grand Prix consistently got the best crowd attendance figures, adding F1 drivers considered Melbourne the best circuit in the world.
Opposition Leader Ted Baillieu said the Government must reinvigorate the event to combat sliding revenue, poor ticket sales and rising costs.
He flagged a three day schedule and better marketing targeting regional areas to lift the event out of the doldrums.
"Clearly Mr Brumby has failed to impress Grand Prix officials and we now run the risk of losing the Grand Prix and Melbourne becoming a major events backwater," he said.
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