F1 owners spend $240m on Vegas site for pit and paddock

Liberty Media is to pay out $240 million to purchase a plot of land to construct the pit and paddock complex for next year’s inaugural Las Vegas Grand Prix night race.

The track layout for the newly announced third US-based F1 race was revealed last month, with most of the race planned to take place on existing city streets including the iconic Strip along which the city's famous casinos are situated.

But there had been questions about some aspects, including where the pit and paddock would be located which ion turn determines the placement of the main start-finish straight.

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But on Friday, in an earnings call with investors, the CEO of Formula 1's owners Liberty revealed that the company had completed a deal to take ownership of currently undeveloped land to the east of Koval Lane.

Greg Maffei said Liberty had "entered an agreement to acquire 39 acres east of the Strip to lock in circuit design and capacity for the pit and paddock, among other hospitality and race support venues.

"I expect that transaction to close in the second quarter and the purchase price was $240m, funded by cash on hand at an F1 group level," he continued. "We don’t have other financial details at the moment of what will be spent there."

Buying the land will allow F1 to build a permanent facility, as has been done in Mimai for this weekend's maiden Miami GP.

It's unusual for Liberty to take over what is usually local promoter responsibilities related to developing a new race on the Grand Prix calendar.

"Differently than most places, Formula 1 and Liberty Media are self-promoting the race in partnership with local stakeholders and Live Nation," Maffei acknowledged.

"The build out for this track will require increased Cap-Ex and Op-X to develop. It's too early to provide you with numbers, but we intend to update you later this year.

“Our decision to promote Vegas in conjunction with Live Nation and local partners is driven by a couple of things. One, proximity: it’s fairly easy, relatively, being in Denver to get to Vegas for us to do the work.

"We have knowledge of local US markets relative to many other markets," he added. "We see the opportunity of being a promoter is a way to expand our understanding of the business.

He said it would help Liberty "understand how to be the best F1 product on the track for other promoters as well, to take 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," he said. "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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