Las Vegas bosses were delighted when Formula One decided to host a race down the famous Nevada “strip”. When the business community in the gambling capital of the free world learned the projected overall economic impact of the inaugural race in ‘sin city’ was $1.3bn, all objections to the chaos setting up the event would cause were quietened.
A similar economic impact study was conducted by Applied Analysis for the Super Bowl taking place in February 2024 at Allegiant Stadium in Las Vegas. That report showed that the NFL’s championship game and events tied to it would leave an economic impact of just half that of Formula One in the region of $600 million.
Mega profits expected for F1
Formula One’s owners are banking the returns from their Vegas races will deliver profits which dwarf that of any other event on the calendar. Liberty Media’s investment already tops $500m into its Vegas operations, a large chunk of which was spent on a permanent paddock building that will provide key race functions and host year-round events.
A 39-acre plot of land for the paddock last year for $240 million and the finalised structure with offer the wealthiest of race goers hospitality like not seen before in Formula One. The views of the pit lane garages and the starting grid have sold for more than the average American earns in an entire year.
Liberty media upset their hosts last year when after the contracts were signed with the Las Vegas authorities they later demanded a $40m contribution for the $80m infrastructure upgrades that were required.
Not an F1 event for the average folk
Formula One in Vegas is not for the average Joe and Jane given average ticket prices are around $6,600 each for the three day ticket. This is over 50% more than the $4,500 its costs to attend F1’s other all new American venue.
No wonder Formula One is loving America.
Unlike the venue in Miami which is self contained, the circuit in Vegas will see the cars hurtling down ‘the strip’ at speeds topping 200 mph passing, The Mirage, Caesars Palace, Drai’s Beachclub, the Bellagio and Cosmopolitan.
The the course takes the racers along Sands Avenue past Planet Hollywood and around the newly built Las Vegas Sphere and Wynn Resorts.
Fans refuse to pay F1 premium
Many of the hotels and Vegas hot spots have officially partnered with Formula One and the race promoters have paid the owners of Madison Square Garden’s soon to be opened Sphere Arena nearly $10 million to empty its parking lot so they can erect spectator stands.
Beer Park which owns a 9000 square foot terrace and almost 100 huge HGTV’s around its venue is an official partner with F1 paying a licensing fee. However this as escalated the price charged by a usually affordable venue to $5,500 for three days access to its space.
One fan posted on twitter, “$8,000 per person for Heineken House?” Which has a multi tier structure and well known DJ’s appearing throughout the weekend.
“As a true F1 fan, very disappointing that nothing at the Las Vegas Grand Prix is affordable — but there are tickets available. Guess I will stick with general admission passes for Austin and Miami.”
F1 partners exempt from additional guest fees
Despite the huge marketing of F1’s arrival in Vegas for the penultimate race of the year, the tickets have not sold. They have been released in limited time only tranches a method used by promoters to create a feel for exclusivity and a shortage of supply.
Hotels like the Venetian and Wynn who have partnered with Formula One are believed to be paying between $2 million and $10 million each and are official race sponsors claims the New York Post. They in turn will not be charged an incremental fee for each resident during the 3 day weekend event.
Now Formula One is trying to shakedown independent Vegas hotspots for money because their businesses happen to be along the route of the newest F1 race in America.
“How dare you have a business for years besides our shiny new track,” one TJ13 commentator quipped.
Planet Hollywood fees demanded
The fee now being demanded of the likes of Planet Hollywood and Black Tap Craft Burgers and Beer is $1,500 per head for th maximum capacity their venues hold.
Regardless of how many guests attend a venue with 1200 seats would be charged a whopping $1,8m and if the venues refuse to pay up, Liberty Media have threatened them with erecting ‘obstructions’ outside to ruin the view of the track according to The Post.
“There is a real chance of obstructing views with stands and barricades,” one source of The Post claimed who is close to the situation
“I know the hotels are upset about it and they are trying to figure out if they’ll play along.”
F1 acting like “mobster Bugsy Seigel”
The source claims to have seen a letter sent to the venues with a subtle threat, “worthy of Vegas pioneer and infamous mobster Bugsy Siegel.”
“Las Vegas Grand Prix will use reasonable efforts to maintain sightedness from licensee’s venue to the track/race,” is the alleged wording.
The Post also claims “salespeople working for Renee Wilm, the Las Vegas Grand Prix CEO and Liberty Media’s chief legal officer, have even threatened that lights will be shined toward the viewing areas of unlicensed venues, blinding guests trying to get a peek at the nighttime race.”
One Vegas executive alleges his venue flatly refused to cough up the $1,500 a head demanded by F1. The response apparently has been for F1 to pressurise the Las Vegas Grand Prix official sponsors to get that venue to cough up the cash in any way they can.
3 months of F1 construction disruption
“They are literally shaking people down saying they will obstruct views unless they pay them,” one irate Casino boss told The Post
“It seems insane that they are asking money for a public event that is taking place in the streets.”
Another executive is reported to have stated, “There is a certain line they are crossing [by] telling someone who has spent billions on their property that you are shutting the Strip down for construction and then asking them to pay for seats.”
Of course as with Monaco and other street circuits it takes several weeks of disruption to erect the structures necessary for a Formula One race. Monaco is believed to spend a total of 12 weeks a year in preparation and tear down for their Formula One event.
Vegas F1 race profits 10 times other events
The businesses of Vegas will suffer a similar inconvenience for the guests particularly during the start of the massive USA “holiday season.”
Formula One are doing nothing illegal given they have been awarded the rights to the race. Further it would be hard for a venue to prove damages were for example lights to ruin the view of the strip.
An estimated 300,000 fans will attend the inaugural event in Las Vegas. Yet there must be concern amongst F1 executives that unlike in Miami where the tickets sold out in 31 minutes, there are still plenty for sale at present. The current average ticket price, accommodation and flights is likely to cost a couple a punitive $15,000.
Yet F1 are looking to raise around ten times the amount for F1 over the amount paid by Silverstone who had a record attendance of 480,000 spectators at the 2023 British Grand Prix.
It’s impossible to come to Spa and not look back at this mega lap⚡️
Lewis’ pole position in the W11 🐐
— Mercedes-AMG F1 News (@MercedesNewsUK) July 24, 2023