Within two weeks, the inaugural edition of the Las Vegas Formula 1 Grand Prix, directly promoted by Liberty Media, will take place. It was necessary to build a new pit building and paddock area with their respective permanent buildings, and over the preparation time, costs have been skyrocketing.
Nothing that worries the company that owns F1, convinced of the profitability of long-term investments. Only this year, about $435 million has been spent on the Las Vegas GP. Still, Liberty Media’s CEO, Greg Maffei, reassured Wall Street analysts.
In a conference cited by the Motorsport.com website, the businessman stated: ‘We have incurred significant expenses in launching the first year of Las Vegas. And that included extra provisions for security and traffic planning, which were required by local regulators. And we had several non-recurring items, such as our exclusive opening ceremony for the first year and the design and launch of our multi-function app and the creation of a fan database.’
Maffei emphasized full confidence in the return on investment in this GP: ‘We remain highly confident in the increased efficiency to operate there and our growing profitability in the second year and beyond. And we remain optimistic about creating broader value that far exceeds the increase in investment and startup costs.’
The American then spoke about the cost increase: ‘I mentioned some of them, increased security, one-time things like the opening ceremony, but there were others like consultants who helped us put it together, allowing costs that were unusual. […]. There are a set of initial costs that are probably higher than originally estimated. I remain very optimistic, we remain very optimistic, as I said, about the overall impact of F1 for Las Vegas and the potential for this race itself to be a profitable exercise.’
And Maffei even hopes that the Las Vegas GP will be one of the most profitable in the entire season: ‘It is still a reasonable estimate of profitability. […]. Remembering how much this impacts us, not only directly but also indirectly, this is a very profitable race for us. As much as it can be measured in the top five. Obviously, we won’t tell the world what the top five are. But we have noticed that this one will have that impact. I still believe that is true.’
