The race is the inaugural event organized by Liberty and the F1 organization, in collaboration with the city authorities and major casino organizations.
Liberty began by acquiring a location to construct a lasting pit and paddock setup, necessitating swift construction to ensure readiness for the race in November.
Liberty is confronted with additional obstacles as it undertakes the task of resurfacing the roads connected to the track, along with other unforeseen problems, in addition to the construction expenses.
“In a call with Wall Street analysts, Liberty CEO Greg Maffei expressed satisfaction in stating that the preparations are proceeding as planned.”
“We anticipate no alterations to our revenue and profitability projections, despite the impact of inflationary expenses. However, we are revising our estimates for CapEx, specifically for the construction of the paddock building and track work.”
“We maintain our confidence in the return characteristics of this remarkable project, which will aid the additional financial investment we are undertaking.”
Brian Wilding, the CFO of Liberty, has confirmed that the expenses have exceeded the initial projections.
Wilding stated that the construction of our paddock building is currently at 85% progress. It is anticipated that the total capital expenditure (CapEx) for the Vegas race, covering expenses for both the paddock building and track-related costs, will amount to approximately $400m. Out of this amount, around $155m was already spent during the first six months of the year.
Las Vegas GP pit complex
Photo by: Las Vegas GP
“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 made investments in security improvements and incurred expenses to guarantee an enhanced fan experience. This includes making changes to the infrastructure to improve sightlines.”
“We have collaborated extensively with our partners in Vegas, and the rapid completion of this project is a clear indication of the strength of these relationships.”
Renee Wilm, the Liberty legal expert who is also now CEO of the Las Vegas event, gave more detail on the issues that have emerged.
She explained that we have encountered a few obstacles such as discovering asphalt and underground cables that required attention. Additionally, there were overhead wires that needed to be relocated.
Much of this was influenced by the demands and, to be honest, necessities of the community members involved as we initiated the process of preparing the track for practical use.
“We have also received additional requests from local stakeholders, including the casino properties, regarding improved security measures and the track’s opening and closing procedures. As a result, we needed to acquire extra equipment and carry out additional road construction.”
The construction of the paddock building is progressing rapidly in an environment of rising prices. Consequently, there have been some extra expenses associated with it.
Las Vegas track action
Photo by: Liberty Media
On a more positive note, Liberty is exploring ways of generating income from the pit and paddock facilities outside the race weekend.
“We have already received inquiries with favorable financial terms for the utilization of the paddock building in the upcoming year,” stated Maffei. “We are excited to disclose our commercial strategies once they are completed.”
Wilm disclosed that there has been significant interest in utilizing the permanent facilities.
“I cannot reword”
Las Vegas is widely recognized as the global hub for conventions, which generates significant attention towards our cutting-edge building that has obtained LEED certification, demonstrating its commitment to energy efficiency and environmental sustainability.
“Our partners within the F1 ecosystem have shown great interest in collaborating with us consistently. Rest assured, there are numerous exciting developments to anticipate in the upcoming months.”
Maffei emphasized that in its second year in 2024, there will be additional activities taking place during the race weekend if provided with sufficient preparation time.
“I cannot reword.”
“And it also implies that there are chances we have not taken advantage of, such as fan festivals, sporting events, and music events. All of these are potential areas for growth in the second and subsequent GP.”