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The investment involves acquisition of 39 acres east of the strip, intended for the pits and paddock, among other hospitality and race support venues.
Formula 1’s Las Vegas Grand Prix remains 18 months away, but the scale of the championship’s investment in the event was indicated on Friday.
The street-based night race is due to take place in the very center of the city, incorporating a stretch of the famous strip, on a multi-year deal from November 2023.
It will be the third annual grand prix in the US, joining the United States Grand Prix at Austin, Texas, and the Miami Grand Prix, which is debuting this weekend in Miami Gardens.
Formula 1 is promoting the grand prix itself in conjunction with its commercial rights holder Liberty Media, subsidiary Live Nation, as well as some local stakeholders, which is different from the majority of the other events on the calendar. Usually an organizing company pays Formula 1 a set fee to host a grand prix; Miami is working on a hybrid system of those approaches.
On Friday Liberty Media CEO and President Greg Maffei informed investors that $240m will be invested to acquire a 39-acre site in Las Vegas in order to build a permanent pits and paddock facility. The plot is a square of land to the north east of East Harmon Avenue and Koval Lane.
The transaction is set to be completed in the second quarter of 2022 and be funded by cash on hand at an F1 Group level.
“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,” revealed Maffei.
Maffei suggested that such a business model could be adopted at other grands prix.
“Our decision to promote Vegas in conjunction with Live Nation and local partners is driven by a couple of things,” he said.
“One is proximity: It’s fairly easy relatively to being in Denver to get to Vegas for us to do the work and we have knowledge of local US market relative to many other markets.
“But more importantly we see the opportunity of being a promoter is a way to expand our understanding of the business, understand how to be the best F1 product on the track for other promoters as well, and to look at the opportunity to grow our knowledge and understanding and potentially promote other races down the road.
“Vegas is going to be large and a perhaps unique opportunity so from a financial perspective we think this one sets up pretty well to be worth the time/extra focus to become the promoter.”
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