Updated November 14, 2023 - 7:21 pm
With the inaugural Formula Las Vegas Grand Prix scheduled to take place next week, event organizers are already looking toward the future races planned for Southern Nevada.
F1 and Clark County this year entered into a 10-year partnership to allow for the race to take place on a mix of public and private roads in and around the Strip during the week before Thanksgiving.
For Liberty Media, F1’s parent company, to spend $500 million all-in on constructing the company’s pit building on the northeast corner of Harmon Avenue and Koval Lane shows they are committed to the future, according to Brian Wendling, chief accounting officer and principal financial officer for Liberty Media.
“Our land and building purchases represent long-term investments in Vegas, where we expect to be racing beyond 10 years,” Wendling said Thursday during Liberty Media’s investor day. “We believe the (capital expenditure) spend is an attractive and organic spend in the business versus acquiring an existing business.”
The 300,000-square-foot building was built in just over a year following the groundbreaking ceremony on the 39-acre lot.
“It’s amazing how much Renee (Wilm) and her team have done in a year,” Greg Maffei, Liberty Media CEO said during investor day. “Stood up an entire commercial organization for an inaugural race. Built a 300,000-square-foot pit building. It’s a massive undertaking and it will be an enormous spectacle.”
Confident in long-term returns
On top of the building, the first year of preparing for and hosting the race has various start-up costs associated with it. Those include paving operations for the circuit; curating the opening ceremony planned for Wednesday; increased security; overprovisioning of race access points and food and beverage options; and the development of the Las Vegas Grand Prix smartphone application.
The significant investment being made in Las Vegas by Formula One will be worth the cost down the road, Wendling said.
“We are confident in the long-term returns and see significant opportunities for efficiencies and incremental fan engagements in year two and beyond,” Wendling said.
F1 and Clark County have been negotiating how much public money will go toward the $80 million cost to carry out the initial infrastructure work in Las Vegas for the race. The initial ask of the county was $40 million, but Clark County Commissioner Jim Gibson said this week that those talks are on hold until after the race concludes.
The race has been drawing tons of attention online leading up to event week, accumulating over 144 billion impressions, 71 million video views and 12 million people engaged with the various posts to their social media accounts and websites.
“We’ve also done great work in the community,” Maffei said. “We know we have taxed them with our construction and road delays, but we’ve done great work in the community to bring local hires, investments in facilities, donations. We think it’s a pilot for sustainable event initiatives that we’ve undertaken at F1. We will estimate that the total economic impact that we’ll bring to Las Vegas will be about a billion-two.”
The Vegas race has opened up new sponsorship opportunities for F1, including American Express, who signed a multiyear deal with the race last month.
“The F1 fan base and viewership has grown exponentially over the past several years, so we are thrilled to bring the exclusive access and unique experiences that American Express is known for to our card members and racing fans,” Elizabeth Rutledge, chief marketing officer for American Express, said in a statement.
F1 will look take what they learn from the first Las Vegas Grand Prix and the spectacle surrounding it, to increase the entertainment value to future races on the calendar.
“We’re going to work with other promoters to raise the bar and continually improve the experience at our races. In an attempt to create a Super Bowl-like experience every weekend,” Maffei said. “There is more potential to grow and optimize both the size and the profitability of Vegas in years to come.”
With the hype surrounding the race since it was officially announced last year, to finally see it come to life next week will be a surreal experience for F1 and its fan base, Maffei said.
“The significant benefits to the broader ecosystem are more than just one race,” Maffei said. “We think this is going to impact our fans globally. The excitement of a night race down the Strip will be unparalleled.”