Liberty Media dishing out more money than expected on Las Vegas GP

The hyped Las Vegas Grand Prix is scheduled to debut in November, and Liberty Media are self-promoting this race for a change.

However, it seems that Formula 1's Commercial Rights Holders are having to pay more than expected as they edge forwards towards realizing the race that will be held on a Saturday evening as compared to the traditional Sunday afternoon timing of F1 races.

Liberty Media CEO Greg Maffei spoke to Wall Street analysts about the progress of the Las Vegas GP and was quoted by Motorsport.com saying: "I am pleased to say preparations are running on schedule.

"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," Maffei insisted.

Liberty's Chief Financial Officer Brian Wilding offered more insight regarding the increasing costs; he said: "Our paddock building is now 85% complete.

"We expect CapEx related to the Vegas race including both the paddock building structure and track-related CapEx to be close to $400m, of which approximately $155m was incurred in the first half of the year.

"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.

"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," Wilding concluded.

Renee Wilm, the CEO of the Las Vegas GP, offered more insight on the topic of rising costs; she added: "We've entered into a couple of challenges as we've uncovered asphalt, cables under the ground that needed to be addressed, there have been wires overhead that needed to be moved.

"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. So this has led to additional equipment that was needed, as well as additional actual road work," Wilm revealed.

"With regard to the paddock building, it is being built at lightning speed in an inflationary environment. So as you can imagine, there have also been some additional costs along the way in that regard," the event CEO maintained.

However, Liberty revealed they have potential revenue streams they are exploring by utilizing the race's permanent facilities outside the F1 weekend at Sin City.

Maffei revealed: "We've also been already receiving inbounds with attractive economics for use of the paddock building within the next year. And we look forward to sharing those commercial plans once they're finalised."

Wilm added: "We are just beginning to really scratch the surface on what is available for us on a go-forward basis with the building.

"We have had a number of inbound requests. Think about Super Bowl parties, think about something related to racing, maybe karting, high-end supercars.

"Of course, Las Vegas is the convention centre of the world, so there’s lots of interest in our state-of-the-art LEED [leadership in energy and environmental design] certified building.

“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," Wilm concluded.

Furthermore, and due to the high pace in which the preparations for the inaugural Las Vegas GP are moving ahead, Maffei admitted there have been missed opportunities to make more money from the event which will be exploited in the upcoming installments of the race.

"There will be opportunities, both around the GP and outside the GP as we go into year two," he pointed out. "We moved with lightning speed, the F1 team, Renee's [Wilm] team, to put this in place, and that's probably led to increased costs.

"And it's also meant that there are opportunities we [could] not capitalise on, whether it be fan festivals, whether it be sporting events, whether it be music events.

"All of those are things that potentially can grow around the second and beyond GP," Maffei concluded.