Liberty CEO Greg Maffei has admitted that costs related to this year's inaugural Las Vegas Grand Prix have climbed significantly, but insists that the new event will still be a financial success as well as on the track.
The race will be the first to be directly organised and promoted by Liberty Media and Formula 1 working with Vegas city authorities, rather than through a partnership with a local association.
Liberty purchased a site off the famous Strip to build a permanent pit and paddock infrastructure, the building of which together with resurfacing the roads that will be used for racing is costing close to $400m.
“I am pleased to say preparations are running on schedule,” Maffei told a conference call of investors and Wall Street analysts “Despite inflationary cost pressures, we expect no change in revenue and profitability assumptions.
Despite increased estimates for the paddock building and track work, Maffei said: “We remain confident in the return profile of this incredible project, which will support the incremental capital investment that we are making.”
Maffei added that the building of the new paddock was now 85 per cent complete. "Our team has managed this project on a compressed timeline and in an inflationary environment," he said.
"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.”
Liberty's Renee Wilm, who is CEO of the Vegas race, went into more detail. "We've entered into a couple of challenges as we've uncovered asphalt, cables under the ground that needed to be addressed.
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"There have been wires overhead that needed to be moved,” she explained. “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.
"This has led to additional equipment that was needed, as well as additional actual road work," she explained, adding that the speed of the paddock building had also necessitated additional costs to get things done in time.
Liberty hopes to recover some of its development costs by generating income from the new pit and paddock facilities outside the F1 weekend.
“We're just beginning to really scratch the surface on what is available for us on a go-forward basis with the building,” said Wilm. "Las Vegas is the convention centre of the world, so there’s lots of interest in our state-of-the-art [facility].
“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.”
Maffei added that Liberty hoped to extend supporting activities in future races in the city "whether it be fan festivals, whether it be sporting events, whether it be music events".
Such things hadn't been possible in the rush to get the first race ready, he acknowledged, but "all of those are things that potentially can grow around the second and beyond GP".
The maiden Las Vegas GP will be the penultimate race of the 2023 season and is scheduled to take place on on the night of Saturday, November 18 a week before the now-traditional season finale in Abu Dhabi.
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