Agenda Item 5.1 COUNCIL REPORT 31 July 2007 AUSTRALIAN OPEN, AUSTRALIAN GRAND PRIX, AFL GRAND FINAL WEEK, MELBOURNE CUP CARNIVAL AND ARU INTERNATIONAL RUGBY MATCH 2007/2008 FUNDING Committee Marketing and Events Presenter Cr Jetter Purpose 1. In accordance with a resolution of the Council at its Meeting on 26 June 2007, the purpose of this report was: 1.1. to seek approval from the Marketing & Events Committee to sponsor the city activation and leveraging program for one Melbourne Iconic Event, 2007 AFL Grand Final Week, as an interim measure prior to implementation of the new Triennial Sponsorship Process; and 1.2. to seek reaffirmation from the Marketing & Events Committee of the City of Melbourne Events Sponsorship Strategy approved on 8 May 2007 and funded through the 2007/2008 Council Budget Cycle which allocates sponsorship support to the city activation and leveraging programs for Melbourne International and Special Events (Australian Open, Australian Grand Prix, Melbourne Cup Carnival and ARU International Rugby). Consideration at Committee 2. As a result of consideration at Committee, and after debate, the Marketing and Events Committee endorsed the recommendation as detailed below. Recommendation 3. That Council: 3.1. approve on a triennial basis sponsorships for the staging of city activation and leveraging programs for the following events: AFL Grand Final Week ($250K), Australian Open ($120K), Australian Grand Prix ($100K), Melbourne Cup Carnival ($150K) and ARU International Rugby ($100K); 3.2. request a report to the Marketing and Events Committee on the Sustainability assessment of Melbourne Iconic Events, particularly the Australian Grand Prix; and 3.3. include triple bottom line assessment as part of the City of Melbourne’s Event Assessment Tool Council Report Attachment: 1. Marketing and Events Committee, Agenda Item 5.4, 10 July 2007 Page 1 of 12 MARKETING AND EVENTS COMMITTEE Agenda Item 5.4 REPORT 10 July 2007 AUSTRALIAN OPEN, AUSTRALIAN GRAND PRIX, AFL GRAND FINAL WEEK, MELBOURNE CUP CARNIVAL AND ARU INTERNATIONAL RUGBY MATCH 2007/2008 FUNDING Division Economic Development Presenter Scott Chapman, Director Economic Development Purpose 1. In accordance with a resolution of the Council at its Meeting on 26 June 2007: 1.1. To seek approval from the Marketing & Events Committee to sponsor the city activation and leveraging program for one Melbourne Iconic Event, 2007 AFL Grand Final Week, as an interim measure prior to implementation of the new Triennial Sponsorship Process; and 1.2. To seek reaffirmation from the Marketing & Events Committee of the City of Melbourne Events Sponsorship Strategy approved on 8 May 2007 and funded through the 2007/2008 Council Budget Cycle which allocates sponsorship support to the city activation and leveraging programs for Melbourne International and Special Events (Australian Open, Australian Grand Prix, Melbourne Cup Carnival and ARU International Rugby). Recommendation from Management 2. The Marketing & Events Committee recommend that Council approve in the 2007/2008 financial year cash sponsorships for the staging of city activation and leveraging programs for the following events: 2007 AFL Grand Final Week ($250K), Australian Open ($120K), Australian Grand Prix ($100K), Melbourne Cup Carnival ($150K) and ARU International Rugby ($100K) in the 2007/2008 financial year. Key Issues 3. The above Melbourne Iconic Event and Melbourne International and Special Events have played an integral role in shaping the city, attracting tourists and raising the profile of Melbourne nationally and internationally. Melbourne’s global reputation as a Sporting Capital can also be attributed to the role the City of Melbourne plays. 4. As per previous years, Council funding would not be directed into the staging of the actual ticketed event (e.g. Melbourne Cup at Flemington Racecourse), but rather to the running of city activation and leveraging programs to benefit businesses, profile the city and increase the number of city visitors. Funding would also be used to assist disadvantaged sectors of the municipality with access to ticketed events, sporting equipment and other opportunities which may otherwise be unavailable. Page 2 of 12 5. With the exception of the Australian Grand Prix Corporation, all sporting bodies running these events are not for profit and any proceeds they make from ticketed events are invested back into the development of the sport at the “grass roots” level. Without Council funding the city activation and leveraging programs run by these sporting bodies would cease, be significantly reduced or relocated to another location outside the City of Melbourne. 6. The Australian Grand Prix Corporation is a Victorian statutory corporation, established by the State Government to promote Melbourne and Victoria to the rest of Australia and the world, through staging global motor sport events. These events also provide business, social and sporting opportunities for Melburnians and Victorians. 7. City of Melbourne’s Pedestrian Activity Reports clearly demonstrate increases in pedestrian activity during these events (reports are available to Council upon request). For example, Friday 29 September 2006 (AFL Grand Final Parade day) recorded the highest level of activity for the month and demonstrated a 17.7 per cent increase on the previous Friday. The level of pedestrian activity on this day was similar to the high levels recorded on the Fridays during the Commonwealth Games demonstrating the significant attraction of this event. 8. Council’s funding of the city activation and leveraging programs for these events provides many opportunities to the city that cannot be purchased outside of the sponsorship. For those remaining opportunities that can be purchased, the cost increases significantly as a non-partner rate applies. 9. All the sponsorships provide significant value for Council’s investments specifically via the delivery of city activation and leveraging programs. These programs deliver many benefits to Council and its constituents and these are summarized below. (Please note the figures quoted are from Federation Square counters, Police estimates, surveys and independent evaluations). AFL Grand Final Week 10. The Australian Football League, with City of Melbourne’s input and support, has grown the AFL Grand Final Week into one of Melbourne’s Iconic Events. The week consists of the AFL Grand Final Parade, AFL Grand Final Live Site including an appearance by the AFL Premiership Team and AFL Grand Final Week Activities including the Brownlow Medal Footy Panel, Brownlow Medal Fashion Preview involving city businesses, Auskick Clinic, Kid’s Footy Show featuring Dipper, AFL player appearances, Australian Idol Concert, AFL Grand Final Footy Preview Panel, interactive activities and displays and a concert from a leading Australian band. 11. Over 248,000 people from Melbourne and interstate attended these free city activities in 2006 and the AFL Grand Final Week Activities recorded a 9.2 per cent increase in numbers from 2005. Importantly, 58 per cent of people surveyed attending the AFL Grand Final Parade were from interstate and 96 per cent of people were not working in the city on the day of the parade. These activities improve and extend the city experience and enable people without a ticket to join in all the excitement of the AFL Grand Final. 12. The 2006 AFL Grand Final injected almost $36 million of economic activity into the local economy. The level of economic activity has grown as the AFL Grand Final has been turned, from a one day event on a Saturday afternoon, to a six day festival of activity in the heart of Melbourne. It encourages interstate visitors to stay longer in the city and for Melburnians and tourists alike to visit the city to take part in the free activities. 13. Council funding enables the following: 13.1. running of the AFL Grand Final Parade to meet all risk/safety requirements with quality content and audio/visual provision; 2 Page 3 of 12 13.2. running of Grand Final Week Activities and a Live Site with quality content to appeal to football fans of all ages and meeting all risk/safety requirements; 13.3. provision of ticketing and equipment for Community Services and the Active Melbourne Program to aid disadvantaged groups in the municipality and to encourage participation amongst youth groups; 13.4. destination promotion of Melbourne nationally through prominent branding on the ground at the MCG and Telstra Dome throughout the Finals Series and Grand Final (valued at the equivalent of $108,000 of national television exposure for the three matches in 2006); 13.5. a range of marketing opportunities (eg. AFL Record) to promote different business sectors (eg. bars and restaurants) in the city and Docklands, to people attending matches at either the MCG or Telstra Dome; and 13.6. provision of ticketing for Triple M and Herald Sun promotions to encourage increased numbers of visitors to the city and Docklands. 14. The free AFL Grand Final Week city activities cost the AFL $575,000 to run in 2006 which includes dressing the city during September with city banners, Melbourne Visitor Centre signage and running extensive advertising to encourage people to visit the free activities. The AFL have also had to meet the continued rising costs of staging events in the city with limited increase in Council funding over the past four years. 15. The removal of or decrease in Council funding would result in a limited AFL Grand Final Week program of activity being run in the city which will negatively effect the city experience, reduce visitor numbers and the associated spend in city businesses by these visitors. All other destination, community and marketing opportunities would also cease or be significantly reduced. Melbourne Cup Carnival 16. The City of Melbourne and Victoria Racing Club have worked together in partnership to make the Melbourne Cup Parade and the Melbourne Cup Carnival Live Site two week program of activity the largest free events of the Carnival held off the racetrack.