Formula E is losing big money. Is a race still a good idea for Auckland?

Mitch Evans Formula E Jaguar

Back in March this year, Newshub had an article advising us all that Formula E boss Alejandro Agag wanted to let us know that if Auckland wanted to have a Formula E race scheduled for 2020, they had to get their act together and make a decision, as time was running out. This was on top of a Stuff article from December that basically told us the same thing.

And yet this week we learn that Formula E is haemorrhaging money like NZ First is bleeding support.

Formula E revealed that its pre-tax loss “widened” by 26.7% to $44.7M (NZD) last year, giving it combined losses of $282M since it held its first race in ’14.

Now Formula E is something that the bigwigs at ATEED are pretty keen on. They believe holding a race in New Zealand could generate $150 million dollars for our economy (presumably this is over the requested five year term) with an outlay of only $14 million. Of course the $14M is just to buy the rights. As I understand it, the actual cost of the event would surely be on top of that, even if it is mainly run on the wharves of Auckland. Ask Hamilton how much it costs each year to run the Supercar races!

And everyone knows that if Auckland Council have any role to play in running it, the costs will blow out quicker than you can say “Massive money-hungry hole in the ground”.

Weirdly, James Shaw is reported in the above Stuff article as being “fantastic within the Greens to push this through.”

James Shaw – Electrifying!

Well I guess you can understand why, because, you know, the cars are electric and stuff so that must mean Green. It won’t matter a jot that everyone involved and all of the hundreds of tonnes of vehicles and equipment will have to be flown literally half way across the world and back; or that most of those spectators who will pop in to see the spectacle will be doing so in their cars.

But does anyone actually watch Formula E? Well supposedly they are getting about 330 million TV viewers per year. But considering the entire race series seems to be geared towards people who are more interested in the features of their new phone than car racing, I guess it is no surprise that they are spending more money than a Labour government trying to stay in power.

Certainly when watching it on TV (and I have done that a couple of times just to see if I can get into it), you very rarely get any crowd shots other than at the end when the presentations are on. I suspect that this is due to the fact that spectators often don’t have to pay to see the race.

Sure you can pay $260 for the cheap two day grandstand ticket in New York for instance, or $370 for a better one, but these are very small and the views anywhere are very limited.

So it’s really about getting TV views, and most of those will simply be on the phones of millennials from the free wifi cafe where the hipsters hang out on a Sunday afternoon. It’s all about selling the future of electric vehicles, but I guess in reality, all motor racing is about selling vehicles.

At least the racing is getting better. The cars can even get through a whole race now so the drivers don’t have to stop half way through to jump into a fully charged up spare car in order to finish the race like in the past.

Simon Evans, thrashing this sort of electric SUV race car type thingy.

And doubly good, we have two Kiwis leading the charge. The Evans brothers are front and centre, Mitch driving a Formula E car for Jaguar and Simon driving the Giltrap-sponsored Jaguar I-Pace eTROPHY number 99. Both have won races this year and good on them for finding a way to earn a living from having a hoon. However, I do find it extremely odd that all you can hear are dentist drill sounds interspersed with tyre and brake squeal! It’s just not the same.

So is this the sort of thing that ATEED, Auckland Council, and your government should be spending your money on? And, if so, what guarantees will there be that this money won’t be lost if Formula E goes belly up? After all, the amount Formula E owes its Hong Kong based parent, Formula E Holdings, is an eye-watering $276M as at July 31st last year.

There’s only so many new Jags, Porsches and Ferraris that millenials can afford. And yes, those last two are likely to join the fray soon.

If the Formula E circus comes to Auckland, I’ll probably go and check it out just to see if it is any better in real life, but I can guarantee that I won’t be paying hundreds of dollars for a seat made of scaffold that can only see one corner. Will I see you there?