Dispelling Sydney’s F1 delusion
By Mat Coch
Tuesday 26th October, 2021 - 3:09pm
The notion that Sydney could host Formula 1 is delusional to the point of being absolute fantasy.
Last week Seven News reported that “high level” talks were taking place with the New South Wales Government regarding stealing the Australian Grand Prix from Melbourne from 2026.
It can’t happen sooner, there is a contract that runs to 2025, though one must concede there is precedent given Adelaide had a deal for 1996.
That aside, there are a number of critical hurdles that need to be overcome before the event could even realistically be pitched to Stefano Domenicali, F1’s CEO.
Key among those is a viable venue, with The Rocks in the north of Sydney’s CBD arguably the worst location imaginable for the event.
The Rocks is an historic part of Sydney, largely constructed in the late 1700s as Europeans colonised land that was originally known as Tallawoladah by the Cadigal people.
In-keeping with the times, the streets are narrow. George Street, which runs down its eastern side is scarcely more than two lanes wide.
Current Australian standards for roads recommend 3.5m lane widths, suggesting that section, which would be difficult to avoid for any circuit configuration in the area, is only around 10 metres wide (if we’re being generous).
For new permanent Grade 1 facilities, the FIA advises tracks should be at least 12 metres wide, and while there are venues that have pinch points (think Baku), they are not significant in their length.
Assuming that’s not insurmountable, the roads would have to be resurfaced at very least, and potentially reprofiled in parts.
There is also the impact on traffic and businesses to consider; the Barangaroo section of the city has been flagged as a potential pit and paddock location, and is also home to a number of blue chip corporate offices.
There are other considerations too, such as the reaction of locals living within the proposed area, the cost of construction, and the environmental impact.
But taking a step back, it’s important to understand why this ‘news’ found its way out in the first place.
Suggestions that Melbourne could lose the Australian Grand Prix emerge almost annually.
A year ago it was The Bend, previously it’s been a return to Adelaide. This is not the first time Sydney has stuck its head above the parapet either.
New South Wales has recently undergone a change in Premier; Gladys Berejiklian stepping down with Dominic Perrottet becoming the head of government in the state on October 5.
Sydney is Australia’s most populous city and has recently ended a long period of lockdown as a result of the COVID-19 pandemic.
Politically, it is looking to rebuild and move forward from the tumultuous final weeks of Berejiklian’s leadership.
It therefore makes a great deal of sense to be speaking of a bright new future, one with exciting events and opportunities for the state and its constituents.
Therefore it comes as little surprise that Formula 1 is being touted, a useful go-to given its global reach and popularity – it is the biggest annual sporting competition.
Short of the Football World Cup and Olympic Games, the next big ticket sporting event is F1.
There’s just one small problem, and that is the long-standing relationship with the Victorian Government.
Melbourne has hosted the race since 1996, after the South Australian Government afforded it the rights a year early.
Even beyond that there is no suggestion the race will move, nor any whispers out of Melbourne that it has grown weary of the event.
Indeed, quite the contrary given $20 million has recently been spent on the Albert Park circuit, the first such investment since that 1996 event.
But there’s more to it than just the fact Melbourne has a contract and an updated track.
The Australian Grand Prix forms part of a broader events jigsaw that helps stimulate the local economy.
Alongside Formula 1, Melbourne has the Australian Open tennis, Spring Carnival horse racing, and the AFL Grand Final (usually).
These events are all contribute to a vibrant events and tourism industry, a lively hospitality sector, and speak volumes to the liveability of the Victorian capital.
They’re also a point of civic pride, a key point for Jeff Kennett when it came to bringing F1 to Albert Park in the 1990s.
One must also consider Formula 1’s standpoint in all this.
Should Victoria no longer be interested in the race, there are a myriad of hopefuls waiting in the wings.
It is therefore not simply a case of Sydney poaching the event from Melbourne, which likely has a right of refusal clause for future events in its contract anyway, it would have to beat competing international applicants.
Then there’s the sheer economics of hosting an F1 race, which are quite simply staggering.
The NSW Government would be staring down the barrel of something in the region of $50 million annually, likely with escalators, simply for the rights to host the sport.
That’s on top of whatever it costs to get the circuit ready, starting from the conceptual stage to making the racing surface suitable, the acquisition of barriers (hey, Mr Perrottet, maybe give Steve Marshall in Adelaide a call…), not to mention the myriad of other aspects required to make a street circuit workable.
Next, consider the expected return on investment.
F1 takes the income from trackside signage and corporate hospitality, so all the promoter really has left is gate takings.
Given the hemmed-in nature of The Rocks, there are precious few locations for grandstands, and the claustrophobic area does not lend itself to a 100,000-plus crowd.
Remember, it is from the crowd that the promoter earns the bulk of its income – the lower the crowd, the lower the return – and it needs to at least be able to wash its face in terms of the cost to host.
Assuming an annual cost of $70 million to stage (and that’s probably on the low side), that’s 280,000 tickets at $250 each.
Economically then it looks extremely difficult, even if politically it makes for a good sound bite to leak to a hungry mainstream media.
And it’s not as though Sydney needs the global brand recognition – the city is already famous for its Harbour Bridge and wonky-roofed Opera House – meaning the advertising ROI would be comparatively low, too.
Formula 1 is quite simply not coming to Sydney; not now, not in 2026, and mostly likely not in our lifetimes.
The whole concept is nothing more than a PR soundbite that has been given legs it doesn’t have or deserve.