Opinion | Supercars' Newcastle 500 is not a great deal for anyone, especially the city, says Newcastle Partnerships

COVID-19 is causing disruption across many events worldwide. Recent reporting indicates that Supercars is not immune to these issues. Apart from the COVID-19 environment, it seems the event is not good business for anyone.

Archer Capital - who owns 65 per cent of Supercars Australia - has put its shareholdings on the market. There is a sale happening as we speak. The Newcastle event is part of the package - hence their reluctance to tell people this event is not likely to happen, at least not in March.

A recent poll by Newcastle Partnerships found only 28 per cent or respondents thought the event was good for the city. A powerful percentage - 60 per cent strongly disagree/disagreed with the statement.

Archer Capital paid $137 million for these shares. Supercars claimed it was valued at $317 million. Yet Archer Capital is now willing to sell it for $60 million. When the investors are willing to take more than a 50 per cent loss, you must question whether this event is good for anyone, even the majority owners.

The South Australian Premier certainly understood this event was no longer a bonus for the city when he canned the event for good last year. Despite the event being much bigger and more successful than the Newcastle 500, the Premier said it "no longer represents the best return in terms of visitation to South Australia or jobs in South Australia".

Can City of Newcastle still seriously claim the event remains a good investment for the city's ratepayers?

Before signing their deal with Supercars, Newcastle council should have consulted the NSW Auditor-General's Performance Audit into their Homebush event - which was disbanded before their option expired in 2016 and moved to Newcastle. In his press release 23 June 2010 he said:

"The V8 Supercars race at Homebush Bay was managed well on the day and by all reports the spectators enjoyed themselves. But a good day out is not the same as a good deal."

Mr Achterstraat went on to express concern about the negotiation process.

"The Government's negotiating position was weakened by public reports in July 2008 about the Government's in-principle support for the event at Sydney Olympic Park.

"It was not until 10 months later the Government and the promoter negotiated an agreement. Negotiate first, announce second - not the other way around."

Sound familiar?

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The apparent lack of probity underpinning Supercars' deals have followed this pattern. The ACT Government's Performance Audit into the Canberra event in 2002 and Audit NZ's audit of the Hamilton event in 2012 led to both being disbanded before their contracts expired - largely because of their cost.

Then there's Newcastle.

The impending sale will include Supercars' contract with government agency Destination NSW. The deal contains an agreement to hold the first event of the race calendar in NSW. It does not specify Newcastle, so there are options for the event to be run in NSW on a permanent track.

Apparently, Supercars will let us know in the next two months - after the sale has gone through, and around the time pre-polling will open for our local government elections.

What will be interesting in the coming months - perhaps with a newly structured council chamber - is whether Supercars will require council to sign a variation to the Services Deed to allow the event to be pushed back and their five-year option to be taken up.

We can only hope that this time, council will consider this issue important enough for the changes to come before the elected councillors.

The variation signed to change the event from the final in the annual series to its opener did not come before council, despite the lord mayor expecting that "future deeds will be shared with myself and all councillors".

With such a chequered history (pardon the pun), it makes one wonder how many clients will simply be transferred in the impending sale - or will those still "in the race" to host the event be afforded the opportunity to reconsider the true cost/benefit analysis?

Thanks to the Newcastle Partnerships' poll, there appears no need to ask the ratepayers of the Newcastle LGA whether they think the race is good business. Now there is no need to ask Archer Capital either.

It seems an increasingly unpopular event, even with its investors. Be they shareholders or hosts.

Maybe this race is a bit like flogging a dead horse - or outdated V8 horse-power.

Time will tell.

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