Increasing costs no threat to Las Vegas success


Liberty Media CEO, Greg Maffei insists that despite the increasing cost of hosting a race in Las Vegas the event will be a success.

Never mind Monaco, if Liberty's gamble proves a success, Las Vegas will become Formula One's new jewel in the crown, in terms of style, glitz, celebrities and revenue stream.

Though co-promoter of the Miami event, Vegas sees the sport as sole promoter of a race which is intended to become the season's high point, indeed, previously Maffei made the claim that the race will add $500m (388m) to the sport's coffers.

Not only is F1 promoting the race it has spent almost $400m (315m) in order to purchase the land for a permanent pit and paddock facility which when not being used for the Grand Prix is to be hired out for concerts, fan festivals, sporting events and the like.

However, as is so often the case with such projects the costs are slowly rising, nonetheless, Maffei insists the event will be a success in every sense.

"I am pleased to say preparations are running on schedule," he told a conference of investors and Wall Street analysts following the release of the second quarter financials on Friday.

"Despite inflationary cost pressures, we expect no change in revenue and profitability assumptions," he added. "We remain confident in the return profile of this incredible project, which will support the incremental capital investment that we are making."

Claiming that the paddock is 85% complete, he said: "Our team has managed this project on a compressed timeline and in an inflationary environment. Much of our cost increase is attributed to track-related expenses incurred to be responsive to the concerns of the local community, such as minimising disruption to businesses along the Strip.

"We have also invested in security enhancements and expenses incurred to ensure the quality of the fan experience with infrastructure changes to improve sightlines," he added. "We are working closely with our local Vegas partners, and the speed and efficiency with which we have completed this project is a testament to these relationships."

"We've entered into a couple of challenges as we've uncovered asphalt, cables under the ground that needed to be addressed," admitted Renee Wilm, the event's CEO.

"There have been wires overhead that needed to be moved," she continued. "A lot of this was driven by the requests and quite honestly requirements of the local stakeholders as we began this process of preparing the track for actual usage.

"We've also encountered some additional requests from the local stakeholders such as the casino properties, around enhanced security, around opening and closing the track. This has led to additional equipment that was needed, as well as additional actual road work."

Referring to how the paddock complex will be put to income generating use over the course of the year, she said: "We're just beginning to scratch the surface on what is available for us on a go-forward basis with the building.

"Las Vegas is the convention centre of the world," she added, "so there's lots of interest in our state-of-the-art facility. Many of our partners in the F1 ecosystem are very interested in working with us throughout the year. All I can say is a lot more to come over the next few months."

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Published: 08/08/2023
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