Australian GP costs surge as F1 2027 Sprint triggers major price hike

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.

The addition of a Sprint race at next April’s event, plus ever-rising baseline hosting fees, are predicted to push up costs by more than $10 million over the $48 million 2026 event.

Australian GP cost rockets past $60m as F1 Sprint event confirmed

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.

Melbourne hosted the first race of the season as part of its contract with the sport’s commercial rights holder, Formula One Management, under a deal that will keep F1 in Australia until 2037.

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.

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.

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.

With the support card remaining stable for 2025 and 2026, applying an eight per cent escalator means this year’s event cost around $48.1 million.

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.

Like Formula 2 and Formula 3, there are additional fees associated with a Sprint event.

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.

The short-form races have typically enjoyed stronger television audiences, which bolsters FOM’s ability to increase renewal fees for broadcast rights holders, and increase the price of trackside sponsorship.

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.

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.

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.

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.

Depending on the track build, which varies from year to year, there are approximately 51,000 grandstand seats available in Albert Park.

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.

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.

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.

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.

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.

Construction work is currently underway in Albert Park to replace what was an ageing pit building that was constructed ahead of F1’s inaugural world championship visit in 1996.

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.

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’s a point countered by the $320m AUD injected into the local economy annually.

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.

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