The cost of promoting the Formula 1 Australian Grand Prix is set to reach $60 million in 2027, making it the most expensive race ever staged in Melbourne.<\/p>\n
The addition of a Sprint race at next April\u2019s event, plus ever-rising baseline hosting fees, are predicted to push up costs by more than $10 million over the $48 million 2026 event.<\/p>\n
Australian GP cost rockets past $60m as F1 Sprint event confirmed<\/p>\n
Albert Park will host Round 3 of the 2027 F1 calendar, losing the opening round of the campaign for the first time in three years.<\/p>\n
Melbourne hosted the first race of the season as part of its contract with the sport\u2019s commercial rights holder, Formula One Management, under a deal that will keep F1 in Australia until 2037.<\/p>\n
Part of the deal inked in 2022, which saw 10 years added on to the life of the event, saw a minimum of five opening races over the (then) 13-year period.<\/p>\n
Annual reports show the 2024 edition of the Australian Grand Prix cost $41 million, a useful marker given Formula 2 and Formula 3 both featured on the support card for the first time that year.<\/p>\n
The junior categories are effectively a bolt-on to the base contract with additional fees payable by the promoter, in this instance the Australian Grand Prix Corporation.<\/p>\n
With the support card remaining stable for 2025 and 2026, applying an eight per cent escalator means this year\u2019s event cost around $48.1 million.<\/p>\n
Throwing that forward to 2027 would take the cost of the Australian GP to $52 million, however, that does not account for all associated costs.<\/p>\n
Like Formula 2 and Formula 3, there are additional fees associated with a Sprint event.<\/p>\n
Melbourne will host a sprint race for the first time next April, one of 10 such weekends across the year. According to Formula One Management, three-quarters of fans are in favour of Sprint weekends.<\/p>\n
The short-form races have typically enjoyed stronger television audiences, which bolsters FOM\u2019s ability to increase renewal fees for broadcast rights holders, and increase the price of trackside sponsorship.<\/p>\n
There is little motivation, however, for race promoters unless they can use a Sprint event as a means of drawing a larger crowd, particularly early in the weekend.<\/p>\n
However, the Australian Grand Prix has sold out in recent years, with demand so high that the AGPC has introduced a $700 AUD basic membership (which consists of $275 membership plus $425 for a paddock pass) offering fans the ability to guarantee themselves general admission passes annually before going on regular sale.<\/p>\n
Above the GA membership is another tier for grandstand access, ranging from $1370 to $2045 depending on the grandstand ticket (the total consisting of a $750 membership fee on top of which a grandstand ticket needs to be purchased). A hospitality package is also available.<\/p>\n
While not all tickets to the event require a membership, the initiative does increase the income earned by the promoter without ramping up the face value of tickets.<\/p>\n
Depending on the track build, which varies from year to year, there are approximately 51,000 grandstand seats available in Albert Park.<\/p>\n
Should just 15 per cent of those be reserved for those with membership packages, the AGPC would bring in more than $9 million in additional revenue.<\/p>\n
However, that is unlikely to be additional profit and would instead offset the cost of the Sprint, understood to come with a price tag of around $8 million.<\/p>\n
When added to the expected $52 million hosting fee for the basic event plus Formula 2 and Formula 3 in 2027, it brings the total cost of promoting the Australian Grand Prix to $60 million.<\/p>\n
That is in addition to any setup costs or the ongoing requirements of the Australian Grand Prix Corporation which has seen the event run at a loss of around $100 million AUD in recent years.<\/p>\n
The Victoria State Government, which ultimately underwrites the race, remains committed and is making good on a contractual obligation to upgrade its pit and paddock facilities.<\/p>\n
Construction work is currently underway in Albert Park to replace what was an ageing pit building that was constructed ahead of F1\u2019s inaugural world championship visit in 1996.<\/p>\n
Costs for the lavish new structure have increased following the discovery of asbestos in the old building, pushing the redevelopment costs towards $400 million AUD.<\/p>\n
Event detractors claim that, over the next 10 years, the Australian GP could cost Victorian taxpayers $1.7 billion as fees continue to rise. It\u2019s a point countered by the $320m AUD injected into the local economy annually.<\/p>\n
Melbourne is set to host a race until at least 2037, by which time the baseline hosting fee payable to FOM is expected to exceed $110 million.<\/p>\n
Want to be the first to know exclusive information from the F1 paddock? Join our broadcast channel on WhatsApp<\/a> to get the scoop on the latest developments from our team of accredited journalists.<\/p>\n You can also subscribe to the PlanetF1 YouTube channel<\/a> for exclusive features, hear from our paddock journalists with stories from the heart of Formula 1 and much more!<\/p>\n