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Behind the scenes F1: Why Melbourne's new deal means an upgrade for Australian GP

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Behind the scenes F1: Why Melbourne's new deal means an upgrade for Australian GP
Oct 1, 2015, 10:51 PM

In the latest in our series of interviews with key players behind the scenes in Formula 1, we find out why Melbourne pressed ahead with a long cont...

In the latest in our series of interviews with key players behind the scenes in Formula 1, we find out why Melbourne pressed ahead with a long contract extension to host the Grand Prix and what it's plans are to raise the standard of the event.

We speak to John Harnden, chairman of the Australian Grand Prix Corporation, and it’s CEO, Andrew Westacott.

Earlier this month, it was announced that Melbourne would continue to host the Australian Grand Prix until 2023. Than means the race will continue to be held at Albert Park, the track that has held the event since 1996.

We asked Harnden and Westacott what the new deal means for Australian Grand Prix fans, the state of Victoria and the city of Melbourne.

Melbourne

Q: What does having the Grand Prix until 2023 mean to you? Will you now invest where you might have been nervous too before?

John Harnden: There’s no question the new deal means we can have a much longer-term view then we were able to have. Last year we extended until 2020 and now it’s up to 2023, so we’ve got an eight year horizon, and whether it’s infrastructure or the planning or what we do with the fans, it gives us a lot of surety and gives people confidence to invest in the product as well.

Q: Were you pushing for a new deal as much as Bernie Ecclestone or was it driven from local competition from Sydney?

JH: No, it was actually just a meeting of minds. Ron Walker [the former chairman of the Australian Grand Prix Corporation], who has recently retired, and us last were in discussions for the deal until 2020 and this was a natural progression from that because the desire was to give ourselves a long-term view. All the debate and discussion around Sydney came in on the tail end of that.

Albert Park

Q: What sort of things can you start to look at now you’ve got a new deal?

JH: Well, certainly infrastructure – things like the pit buildings, the circuit. We’re not remotely looking at taking down the pit buildings, but looking at the things we can change and what we can do a little bit differently.

I suppose from a marketing point of view, internationally, we should put in place some other partnerships to get people out there spreading the word to bring people into Melbourne. For them it’s got to be more about a long-term relationship than just a deal for one or two years.

Q: Are you talking about spectators buying tickets? What sort of percentage of ticket sales comes from outside of Australia?

JH: Probably 25 per cent and probably 30 or 40 per cent interstate and international.

Andrew Westacott: Of the uniques, it was probably about 10 per cent overseas. We get 12,000 overseas and 28,000 interstaters, so what John is saying is that we can work with Tourism Victoria because of the big emphasis they’ve got on visitor economy in bringing in people primarily from China, New Zealand and Asia.

We’ve got huge great markets and with John’s contacts, what we can do is get more and push through the network of Victorian offices to package up unique travel experiences for anyone coming into the state, and that’s terrific.

Albert Park

Q: So have you got a target in mind?

JH: Oh we always have targets, but the problem with going and talking about targets is if you don’t hit them!

Q: But is it a reasonably aggressive push to try and get people to come from overseas?

JH: Absolutely, and it always has been. The event has been incredibly successful over a long period and I think that now with the long-term agreements in place.

It showed last year, there was one side of the government that supported extending the contract. Now the other side of government has come in and they’ve supported it, so we really do have lots of support in Victoria.

Q: What’s the official data on the net cost to Melbourne?

JH: There are lots of different views about it. When the Grand Prix came to Melbourne in 1996, there was a lot debate and discussion about it, as everyone remembers. [But] it really symbolised Melbourne and helped but Melbourne on the map – the branding, the talk, and the reputation.

Q: And the money it brings in with visitors spending money?

JH: There’s been lots of studies and all that done, but ultimately, when we look at the branding and the economic benefit and you put that against the cost, we’re way ahead.

Melbourne

Q: So it’s a net gain for Melbourne?

JH: Oh absolutely it’s a net gain, but again, how do you put a value on what that exposure is worth? People can try to put numbers against that and everyone has a different view.

The reality is that the championship is seen by hundreds of millions of people around the world every year, and if we weren’t part of it, we wouldn’t be being seen.

AW: One thing at the macro level that the government is very proud of these days, is that $20 billion comes into the Victoria state economy from tourism. $1.8bn is attributed to the events calendar of sports, culture and art, so ten per cent of the tourism.

It’s monumentally huge – whether it’s the cricket tournament, the Australian Open tennis, the Melbourne Cup, and all the other events that we have. So for the Grand Prix, the key thing from a strategic point of view is that it’s one of those big pillars that allow the events industry to actually flourish and then provide benefits to all the other smaller events.

The other thing it does is the visitation – it’s one of those reasons for coming to the state. Or, for Sydney visitors, to say “great, I want to see Sydney Harbour, but I want to see the Grand Prix too and to do the shopping and have that lifestyle experience.”

Q: Your predecessor was very vocal about the noise of the turbo engines. Do you have similarly strong views and have you voiced them?

JH: I think everyone needs to move forward, that’s the first thing. The engines are going to be tweaked and yes, they might be a little bit louder, and they might not.

But I think there is a great story to tell and I’m not sure whether the sport has really told the story of these cars and the hybrids and what it really means. The technology, it’s just mind boggling what was actually done and the transformation in terms of the power unit for the car and what energy is being used and what that actually means for the everyday person.

I really think that for that to continue as the sport is about the pinnacle of technology and it’s about the pinnacle of motorsport, it’s also still about something the everyday people can and should be able to relate to.

Again, I think the noise of the cars is probably something in the past. We’ll have to wait and see, as there’s no question that the fans love the noise and all that.

Q: But is it also about the general spectacle and the cars not being as fast as they used to be – something they’re trying to address for 2017?

JH: It’s like anything, I think the reason why people say they don’t look as fast or some of those things, is more because of the racing. We perhaps haven’t had quite as much of the wheel-to-wheel racing and that tends to make it look a bit different as well.

Daniel Ricciardo

Q: What about the Ricciardo affect – is a draw to the Grand Prix?

JH: There’s no question he is a draw card with that infectious smile that he has. But the Australians have loved the event even before we had [Ricciardo], Mark Webber was on the grid and Australians have always had their heroes: Michael Schumacher, Webber, Ricciardo and Alonso – even Vettel, there’s a lot of Vettel fans out there as well.

I think all of Australia would love to see Daniel go to the next step. There’s no question this year’s probably been a year of treading water, that’s probably the best way of putting it, whereas last year he took the world by storm. We’re looking forward to next year to see what he can really produce.

But, again, in Australia people want to see great contests – McLaren is a huge brand and has a huge following in Australia and to see Alonso and Button up at the front, they’re big draw cards, the fans love them.

One of the things that has been great in Australia is all of those world champions and personalities of the sport, we’ve tried to make certain with Mark and with Daniel, that while there is enormous support for them and we go out of our way to enormously support them, it’s the F1 world championship and it’s got to be about all of the drivers and they are always going to change as the years go by.

Q: Is part of the new deal getting more interactivity with the drivers and teams and being able to put on more fan connectivity events?

JH: We’ve always had a great relationship with Bernie and the stuff that we have done with the drivers over the years, and we have been able to build on that. Last year Andrew and the team, with the Melbourne walk and the FanFest, really set a tone.

It’s no different for all the promoters, it’s about sitting down and having a vision for the things we can do to bring the fans closer to the sport and then push hard to make that happen?

Daniel Ricciardo

Q: But are there opportunities to get the drivers to do promotions for the race in the months beforehand, not just at the race itself?

JH: Absolutely. Our biggest challenge is how do you make the Grand Prix in Melbourne? It’s a discussion over 12 months to a year, as opposed to a month or two in March.

Again, with the long-term [deal], perhaps that also so give us the opportunity to put in place a few more relationships to have the feedback coming and to get it to the people of Australia.
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