The Australian Formula One Grand Prix is costing Victorian taxpayers more than $30 million a year for the privilege of staging the annual race, according to an exclusive Herald Sun story today.
The newspaper claims it has seen documents that reveal the Victorian state government will pay billionaire F1 boss Bernie Ecclestone nearly $170 million for the licence to stage the race annually between 2011 and 2015.
Successive governments have cited commercial sensitivity as the reason for refusing to reveal the licence fees since Melbourne replaced Adelaide as the host city in 1996, though have conceded that the race loses tens of millions of dollars annually for the state.
The licence for this year’s grand prix, which will take place between March 13th to 15th, has cost $34.2m, the Herald Sun reports – a $1.6m increase on 2012. The newspaper says the documents reveal the fee will rise to $35.9m and $37.7m in 2014 and 2015 respectively.
Ecclestone, now 81, has ruled Formula One for decades, and is renowned for his tough negotiating stances. He holds the commercial rights to Formula One through his Formula One Holdings company, charging governments to host a grand prix race.
The licence fees for staging a race are typically negotiated every five years.
The fees vary significantly between events. Monaco is understood to pay nothing thanks to its status as the most prestigious race on the F1 calendar, while Singapore is believed to pay one of the highest figures – almost double that of Melbourne.
Victoria, however, is paying less for the grand prix rights than it was prior to 2010.
A 2008 report by a European publication, Formula Money, said the Victorian government paid Ecclestone $42m for the right to stage the 2008 Australian Grand Prix.