MELBOURNE—Melbourne has retained the Australian Grand Prix until 2015 after defying demands by Formula One powers to stage a night race.
Victorian Premier John Brumby today announced the grand prix would continue for the next seven years as a twilight event.
But he would not reveal how much the government must pay to stage the event under the new contract.
The deal was brokered with Formula One supremo Bernie Ecclestone in London overnight, ending months of speculation Melbourne could lose the troubled race after its contract expired in 2010.
Mr Ecclestone had said the Melbourne race could only survive if it was held at night, to capitalise on European television audiences.
Mr Brumby said it took "persistence and persuasive argument" for the powerful FI chief to back down.
"Seriously, this is a big win for the state ... this was a not-negotiable," he said.
"I think there were a lot of people who said if we held firm we would lose the event.
"We held firm on that and we've retained the event.
"We've got the race, no artificial light, a twilight race ... good for us, good for the event, good for Albert Park and we still get a better starting time throughout Europe."
Under the new five-year contract, the race will start at 5pm from next year. Future races will be adjusted, depending on the time of year, to run in twilight with no artificial lights.
Shifting from 3.30pm to 5pm means the race will be televised in the UK at 7am local time.
Mr Brumby estimated the timeslot would attract millions of extra television viewers.
It was the carrot needed to convince Mr Ecclestone, who had been chasing more lucrative deals overseas.
"I'm satisfied that the decision to move to a later start time for 2009 races is a win for television audiences in Europe and Asia, a win for Melbourne and a win for Formula One as a whole," Mr Ecclestone said.
Mr Brumby would not say how much the government paid in licence fees to keep the Grand Prix in Melbourne, but he said it was a "good value for money outcome".
The event was moved from Adelaide to Melbourne in 1996 and has never made a profit.
Last year the race cost more than $78 million to run and suffered a $35 million loss.
That figure is tipped to rise amid growing costs and poor ticket sales.
But the government says the flow-on effects are worth it, with the event watched by a global audience of more than 100 million people.
The race generated an economic benefit of almost $175 million last year, according to the Australian Grand Prix Corporation's 2007 annual report.
Under the new deal, hammered out by grand prix chairman Ron Walker during his holidays in London, the race will also be carbon neutral.
But that has done little to appease opponents who have vowed to fight on.
"It's wrong politically ... economically and environmentally," Save Albert Park president Peter Goad said.
"Financially the race, it's a disaster for the state."
Major events and industry bosses welcomed the announcement.
Victorian Opposition Leader Ted Baillieu said while it was a good result, the event must smarten up.
"Revenues have fallen, costs have fallen and losses have risen significantly," he said.
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