Liberty Media, the owners of F1, acquired a 39-acre site for $240m and expect to spend at least the same sum on the 3.8-mile circuit and pit, according to the Financial Times.
They hope that the first race in Vegas since 1982, on November 18, will generate $500m in revenue.
The strategy to purchase and own the land is different to usual, where F1 works alongside a local promoter to share the costs and risks.
How F1 will make money in Vegas
- Broadcast deals
- Sponsorships, including from major Vegas hotspots Caesars Entertainment, MGM Resorts International and Wynn Las Vegas
- Beer brand Heineken is the title sponsor
- Fees from promoters who sell tickets
- A three-day ticket costs $500, a “high-end” five-day ticket costs $15,000
The initial $500m purchase of the land in Vegas means that F1 will expect profits to soar in future years.
Liberty Media bought F1 for $8 billion six years ago.
The sport’s US profile has grown massively since, in part due to Netflix series ‘Drive To Survive’ and the Miami Grand Prix.
F1’s revenue was $1.8 billion in the first three quarters of 2022, a $300m increase from the first three quarters of 2019.
The F1 Las Vegas Grand Prix is one of the most anticipated weekends in the 2023 F1 calendar.
“What we did is basically change completely, opening up a new way of communicating,” F1 boss Stefano Domenicali told the Financial Times.
“Our objective is to make sure that all the fans [who are] attracted by the lifestyle [and the] the protagonists behind the scenes get into real racing.”