MOTORSPORT: Question mark over Australian F1 GP future

New doubts have arisen today about the future of Australia's Formula One Grand Prix beyond next year.

The Melbourne race next March 15 is the last under the existing contract and Victoria's major events minister Louise Asher has cast doubt on whether a renewal of the deal to stage the GP will be signed before the state's election on November 29 this year.

Asher has said "the time factor is not pressing at this stage", although F1 race contracts usually are signed years in advance.

Questions were being asked in Melbourne today about whether the 2015 GP around the lake at Albert Park may be the city's – and Australia's – last.

News that dealings for an extension of Melbourne's GP contract still have not been finalised came this morning in the city's largest-selling newspaper, the Herald Sun, which headlined its article: "Grand Prix poll limbo – minister silent on contract progress".

Australian Grand Prix Corporation chief executive Andrew Westacott told the paper: "Discussions are ongoing and it is very much a work in progress."

Asher said the conservative government "is determined to get the very best deal possible for Victoria", while the Labor opposition accused the government of "dragging its heels about the event's future".

Asher's equivocation is contrary to a view a well-placed source gleaned from her office in recent weeks that the GP contract would be renewed before the Victorian election.

There's still no real clue as to what the stumbling block is – whether it be the race fee demanded by F1 chief Bernie Ecclestone, whether state officials do not see benefits outweighing the costs, whether Victorian decision-makers simply have tired of the event after two decades, or whether Ecclestone’s ongoing trial in Germany on bribery charges is an impediment.

London's Guardian newspaper reported last Friday that the major shareholder in F1, private equity company CVC, was preparing to sell part of its 35.5 per cent stake in the empire that is the world's premier motor racing series but had decided that 83-year-old Ecclestone had to go anyway because his trial and business affairs were an embarrassment.

Ecclestone was dismissive of that report during the weekend’s British GP, even declaring he was interested in increasing his stake in the business again.

The German trial – concerning US$44 million Ecclestone paid to jailed German banker Gerhard Gribkowsky, which the F1 tsar admits but denies was a bribe – is due to last until September 2014.

Australian GP chairman Ron Walker, who snatched the country's round of the F1 world championship from Adelaide in the 1990s and has been delegated by successive Victorian governments to negotiate deals with Ecclestone, counts the London-based tycoon as one of his closest friends. Walker, who has been in poor health in recent years, would be unlikely to deal with any other F1 representative on a new contract for Melbourne.

One of the ironies of the delay in Melbourne extending its GP deal is that Canadian city Montreal, whose F1 event is the most similar to that of the Victorian capital (on a temporary street circuit close to the centre of a major city), recently signed a new 10-year deal on its GP.

And, unlike the secrecy that has always surrounded the financial arrangements in Melbourne's contracts with Ecclestone, the Canadians revealed precisely what they will pay for that extension.

They said they will shell out C$187 million over the decade of the Montreal contract. The Canadian and Australian dollars are almost at parity.

The Canadian government and Tourism Montreal each will contribute C$62.4 million, the Quebec government C$49.9 million and the city of Montreal C$12.4 million to F1. The city also will stump up an estimated C$30 million on upgraded infrastructure.

Melbourne's race has been costing Victorian taxpayers more than A$50 million a year in recent times – almost A$60 million a couple of years ago, but trimmed back a little last year.

Those are bottom-line losses rather than simply Ecclestone's race fee.

However, at the rate the red ink has flowed in Melbourne – which projects simply to half a billion dollars for another decade – the Montreal deal looks comparatively cheap, with the Canadian city perhaps paying as little as half or less than Melbourne for its event.

Montreal claims tourism spinoffs of about C$75 million a year, while Melbourne has claimed benefits approaching A$200 million a year, although some reports have put them at much less than that – and indeed less than those of Montreal.