One of the most highly anticipated moments of the 2023 Formula 1 season is undeniably watching the 20 supremely talented drivers racing through the streets of Las Vegas. Over the years, F1 often showed significant interest in bringing the historical motorsport series back to one of the most famous places on Earth – Sin City.
And, the dream finally paid off in 2022 when Liberty Media officially announced the newest addition to the racing calendar. However, the money in play was always going to be over the roof, considering the location the refreshing new F1 owners had chosen. As expected, reports eventually began popping up, with a majority of them suggesting the agreed-upon could well be over $240 million.
It may be the #F1 summer break, but the hard work doesn’t stop in Vegas 🔨 🏗 #LasVegasGP pic.twitter.com/ltQwT0sOtJ
— F1 Las Vegas (@F1LasVegas) August 2, 2023
The million-dollar investment included land acquisition worth 39 acres. But, that’s not it! The budget also includes a lavish pit building, massive roadworks, and more. “Liberty Media did enter an agreement to acquire 39 acres east of the strip to lock in circuit design and capacity for the pits and paddock, among other hospitality and race support venues,” Liberty Media CEO Greg Maffei said.
However, despite the in-depth analysis, it looks like Liberty Media could be spilling more money than imagined into hosting the first F1 Grand Prix in Vegas.
F1 owners remain calm despite major financial miscalculation ahead of the Las Vegas GP
According to Liberty chief financial officer Brian Wilding, the premeditated budget of $240 million is highly unlikely, as the final expenses could well exceed $400 million. However, the situation is seemingly calm as the owners are quite confident that the revenue from this particular event could effortlessly surpass the invested amount.
“Despite inflationary cost pressures, we expect no change in revenue and profitability assumptions that we laid out previously. We are increasing CapEx estimates for the paddock building and track work. We remain confident in the return profile of this incredible project, which will support the incremental capital investment that we are making,” he said according to Autosport.
⚠️ | Las Vegas GP going over the $400M budget?
According to Liberty chief financial officer Brian Wilding, Las Vegas GP’s costs have gone beyond the original estimates closing onto $400m limit, while still being optimistic on the revenue
“Despite inflationary cost pressures,… pic.twitter.com/3XRxwjcIBh
— RBR News 🇳🇱🇲🇽 (@redbulletin) August 7, 2023
Furthermore, F1 has already threatened surrounding venues to pay licensing fees after hearing of certain commercial properties looking to make a profit out of the event. If a property denies to pay the fee, the F1 owners will block their view of the track with black screens, similar to the one in Monte Carlo.
Overall, the forecast is that the inaugural Las Vegas Grand Prix could return a revenue of $500 million and a whopping $1.3 billion worth of economic boost for Sin City itself.