Reports claiming that the newly announced Las Vegas Grand Prix could be worth £1bn in hosting fees over the next ten years are surely the best April Fool's joke the sport has ever witnessed.
A number of media outlets, certainly in the UK, are today running a story which can be traced back to the Daily Mail.
According to the British tabloid, "Formula One chiefs have potentially sealed the sport's first ever £1billion deal with a new race in the calendar", and "should the arrangement last a decade, the billion-pound mark will be exceeded".
"Rather than receive a fee from the host city, as is usually the case, F1 will themselves promote the event," claims the article.
"Sources believe this could accrue more than £100 million per race," it continues "If the arrangement lasts for a decade, as is minimally hoped, the billion-pound mark should be exceeded, making Las Vegas the most lucrative grand prix ever.
"Ticket sales, merchandise revenues and sponsorship deals will fall straight into Formula One's bank account."
Well, according to Pitpass sources, the claim is "nonsense", because "the only way any race could get close to 100m is from a hosting fee and Vegas isn't paying one because Live Nation is the promoter."
Live Nation, of course, is the American event promoter and venue operator which in 2010 merged with the ticketing giant Ticketmaster to form Live Nation Entertainment, which is 32.4% owned by... Liberty Media. Indeed its chairman is Greg Maffei, who is also CEO of Liberty Media, Sirius XM and TripAdvisor.
"£100m per race is literally impossible," says our source. "The highest grossing ticket sales come to circa $25m (200,000 x $125 average) then there is $10m of corporate hospitality and max $5m of title sponsorship. Even if Vegas was double that it would still be way, way off £100m per race."
While Live Nation is promoting the event, along with the Las Vegas Convention and Visitors Authority (LVCVA) there will be backing, as confirmed in Thursday's press release, from Founding Partners Caesars Entertainment, MGM Resorts International, and Wynn Las Vegas and Presenting Partners MSG Sphere, Resorts World Las Vegas and The Venetian Resort.
Fact is, like the rest of the entertainment and hospitality industry, Las Vegas was hit hard by the global pandemic and one of the key reasons the various partners came on board was the need to bring tourists back to the legendary resort.
However, according to our source, "none of them was prepared to pay top dollar".
Indeed, one held out for as long as possible, unwilling to pay even the minimal (single digit) amount being demanded.
We won't name names but, as a clue, back when it had a record label, said 'partner' was the label on which the first three Velvet Underground albums were released.
The £1bn - even $1bn - is utter bollocks... indeed, curiously, for a sport which is becoming increasingly US-centric, the United States is hardly proving to be financially rewarding for its owners.
Broadcaster ESPN, which is currently claiming record viewer numbers, pays just $6m a year for the rights to cover F1 in the US, one of, if not, the sport's lowest broadcast fees
While the Circuit of the Americas pays $30m annually, which is around the average hosting fee, Miami will pay nothing and Las Vegas' fee is "below average.
Even Netflix, creator of the Drive to Survive series which has had fans flocking to the sport doesn't pay F1 for the privilege. No, F1 pays Netflix, then again it has proven to be a very, very successful marketing tool.
Then again, as Netflix' customer, this explains why Stefano Domenicali has been so vocal of late over some of the liberties the series has taken - if you'll pardon the pun.
Anyway, kudos to the Mail for an excellent April Fool.
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