F1 boss takes pay cut as Denis Napthine drives hard bargain in race deal

BILLIONAIRE Bernie Ecclestone appears to have taken a pay cut to keep the Formula One Grand Prix in Melbourne.

Victorian Premier Denis Napthine said the deal ‘locked in’ the current start time of 5pm. ‘It is going to be run in daylight time.’

BILLIONAIRE Bernie Ecclestone appears to have taken a pay cut to keep the Formula One Grand Prix in Melbourne, with Victorian Premier Denis Napthine describing a new, five-year contract as “significantly better’’ than the current agreement.

In keeping with the established practice of state governments, Dr Napthine declined to confirm what fees would be paid to Mr Ecclestone’s Formula One Management as part of the new contract, which will keep the race at Albert Park until 2020.

But when pressed on whether the fee for the 2016 race — the first under the new contract — would be more or less than the fee for next year’s race, Dr Napthine said: “I can tell you the new contract is significantly better for Victoria than the previous contract.’’

Under the new terms, the Australian Grand Prix, run in March, cannot be raced under lights and must be the opening race of the F1 season.

Dr Napthine said the deal “locked in’’ the current start time of 5pm. “It is going to be run in daylight time,’’ he said.

The twilight start time was a firm condition of the Australian Grand Prix Corporation, which feared the additional costs of staging a night race would have made the event economically unviable. A later start time was favoured by Mr Ecclestone to generate greater television revenue in Europe.

The event cost taxpayers $50.7 million to stage last year, down from $56.7m the previous year.

The management fee was $36m last year and will climb to $37.7m next year, the final year of the existing contract negotiated by the Brumby Labor government. The government has yet to publish the cost of this year’s event.

Mr Ecclestone, 84, retains control over the day-to-day running of Formula One despite facing bribery charges in Germany. Earlier this year he proclaimed his “great admiration’’ for Vladimir Putin and said he “completely agrees’’ with the Russian President’s stand against homosexuality.

Dr Napthine said he didn’t agree with Mr Ecclestone’s views on Mr Putin or homosexuality but supported the grand prix as a major driver of jobs and tourism. He said Melbourne beat competition from Sydney and other world cities to secure the event.

The Australian Grand Prix Corporation claims the event delivers $75m to $80m in economic benefits to the state.

The management fee associated with the race is politically and commercially sensitive.

The new contract was negotiated between the Australian Grand Prix Corporation and the private equity firm CVC Capital Partners, which owns a controlling stake in Formula One. Mr Ecclestone stepped down from the CVC board after the bribery allegations emerged.

The management fee covers some of the costs of bringing the event to Melbourne, such as transporting the cars.

“There is nothing that goes straight into an individual’s pocket,’’ Australian Grand Prix chief executive Andrew Westacott said earlier this year.

“Formula One is paid to bring the show to town.’’