More than $1 billion spent: The financial backbone of the Australian Open

Hosting the Australian Open has become one of Victoria’s most significant long-term sporting commitments, backed by sustained public investment and an agreement with Tennis Australia whose full details remain out of public view. While the state government insists the tournament delivers clear economic returns, the scale and structure of that investment continue to attract scrutiny.

Unlike the Australian Grand Prix, where Victoria pays a hosting fee that climbed to $102 million in 2024, Tennis Australia maintains that no equivalent payment exists for staging the Australian Open. However, taxpayers have still contributed more than $1 billion since 2011 to upgrade Melbourne Park, ensuring the venue meets world-class standards and securing the tournament’s future in Melbourne until at least 2046.

The agreement between the state and Tennis Australia includes commitments to spend $972 million over a decade on infrastructure improvements, a program completed in 2021. That arrangement was further extended during the COVID-19 pandemic, when a $106 million state-government bailout locked the event in for an additional 20 years. Despite the lack of transparency surrounding the contract itself, Tennis Australia continues to emphasise the Open’s financial independence and broader value.

“The AO stands on its own two feet financially as well as making a major contribution to the Victorian economy. It is also the major revenue source for Tennis Australia to fund the sport and facilities throughout Australia,” a Tennis Australia spokesperson said.

Ongoing investment has not stopped there. The Melbourne and Olympic Parks Trust, which manages the precinct, reported spending at least $20 million on tennis-related upgrades during the 2024 financial year. These works included improvements to the retractable roof at John Cain Arena and the addition of new plunge pools and ice baths for players at Rod Laver Arena. A further $45 million was invested last year to ensure Melbourne Park “continues to meet Grand Slam standards” while supporting year-round events.

Melbourne Park now hosts more than 500 events annually, ranging from major concerts to rugby, football, basketball and netball. Tennis Australia remains the precinct’s largest tenant, paying $68.7 million last year in rent and associated expenses. According to Tennis Australia, the Open generated a “total expenditure stimulus” of $565.8 million last year, with projections suggesting the figure will exceed $600 million this year.

KPMG chief economist Brendan Rynne expressed confidence in the event’s overall return on investment but urged caution when interpreting headline figures. He warned that including spending by Melbourne locals—who made up 63 per cent of spectators—could overstate the true economic benefit, as that money would likely have been spent elsewhere regardless.

Still, Rynne highlighted intangible benefits that defy traditional measurement. “That positive feeling of knowing that we are one of the global destinations like London, like Paris and like New York; that we’re held in top-tier regard. There’s a sense of goodwill and positiveness associated with that,” he said, adding that the Open also strengthens Melbourne’s reputation as a destination capable of hosting major global events.

With the Victorian Auditor-General set to review state spending on major events in the 2026–27 financial year, the balance between public investment, transparency and long-term benefit is once again under the spotlight.