Earlier this year I mentioned that the last straw of economic credibility the Australian Grand Prix had was Tourism Victoria’s assertion that it “provides a media or advertising-equivalent value of $35.6 million to Victoria.” The Comperio Research report which quantified this wasn’t released until I put in a freedom of information request and Sue Pennicuik asked for it in parliament. I’ve had it for a while now and just got around to looking at it. It is, to say the least, a landmark study in Major Events Mathematics, which Bernard Keane at Crikey defines as:
A special branch of applied mathematics, Major Event Maths is studied closely in consultancies working for governments, and sporting bodies, and deals with the remarkable properties of Major Event Numbers, which do not comply with ordinary laws of maths but instead have an additional dimension of multiplication and a capacity to erase negative symbols. Thus, for example, a grand prix that costs Victoria $50 million somehow is estimated to generate $30 million in benefits.
In this ground-breaking work of Major Event Maths, some highlights included:
- 65 million people watching the GP in Italy (population = 60m)
- $10,015,809 worth of “Gross Media Value” from coverage in Hungary
- Estimates of values derived from coverage in Liberia, Djibouti, Eritrea, Saint Helena and others
- The executive summary appearing in section 5?!
So, the “Net Media Value of Total Coverage” derived from the GP is $35,594,305. What Tourism Victoria fail to explain (or failed to understand) is that this is the advertising equivalent value OF THE ENTIRE RACE. Within this the “brands” of Victoria, Australia and Melbourne received:
116,085 seconds (32 hours and 14 minutes) of brand exposure, returning a Gross Media Value of AU$20.9 million and a Net Media Value of AU$6.0m
Did you get that? EVEN THE EVENTS MATHS SPECIALISTS ONLY THOUGHT WE GOT $6M OUT OF IT. Tourism Victoria have mislead the public by claiming a $35.6m benefit to Victoria when their own report plainly states that the “Net Media Value” to Melbourne and Victoria is only $6.0m.
This brings the Comperio Report broadly into line with other events maths practitioners such as Formulamoney who estimated that the GP brought in total brand exposure of $58m from which Melbourne garnered a whopping $262,552. Formulamoney only track the “brand” of Melbourne, while Comperio include in their analysis mentions of Victoria, scenic shots of Melbourne, mentions of “Australia” and “Australian Grand Prix”, perhaps explaining some of the difference with Formulamoney.
You still wont find this paradigm-shifting report on the internet, but I have a hard copy which I’ll make available to advanced students of major events maths. Researchers in Sponsorship Theory and GP fans in Swaziland are particularly encouraged to apply.
Major Events Maths is very populat the world over. I suspect the it was first developed in the USA. Austin Texas has just hosted its first F1 grand prix and the organizers have claimed an economic impact (ie the spending by visitors) of $293 million. Austin is about the same size as Adelaide.
The state has paid the race hosting fee of $25 million, and wants to show it has got its money’s worth. The state is now going to conduct its own economic study, and the findings will be interesting. Will they just do another economic impact assessment ? According to Major Events Maths economic impact equates to economic benefit (ie increased turnover equals profit).