American Revolution Takes Over as F1 Breaks Marketing Policy With Mega $500,000,000 Move for Las Vegas GP

A lot of Formula 1 entities were concerned when Liberty Media was set to take over the sport. Although the American owners have revolutionized the sport from a business perspective. Formula 1 is now a living, breathing, and exponentially growing business. The sport’s popularity has also skyrocketed as we all know. These factors can all be quantified with one unit of measurement, money! The monetary value of everything related to F1 has increased drastically as well. This is exactly why Liberty Media is breaking the norm and taking a $500 million gamble on the upcoming Las Vegas GP.

That’s right folks the countdown has begun and the circus will take over Vegas in about 100 days. However, the inaugural Las Vegas GP will be like no other because of one distinction, F1 is putting all its eggs in this basket. F1 is an asset-light business; so all teams, cars, tracks, and even races are independent ventures. But this norm will be broken for the Vegas GP. According to F1 journalist Joe Pompliano, as is well-marketed since 2022, F1 owners will play promoters of a race for the first time. Why spend $500 million to set up the race in Vegas and take the risk? Well, there’s a good reason!

For the unaware, F1 makes money through three channels, sponsorships, media rights, and race promotions. Until Vegas, F1 was delegating promotional duties, but not anymore! Race promotions pool in massive amounts of revenue during a race weekend. Now, instead of taking a fee for Vegas, as they do for all other races, Liberty Media wants to collect all the money generated from the race weekend.

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Again, if it’s still not clear why would F1 owners take the risk, let us explain further.

Why F1 owners are heavily invested in the Las Vegas GP

The first year alone will take a $500 million investment from the American owners to make the Vegas GP possible. This massive investment also includes the purchase of $240 million worth of land spread across 39 acres. The owners are creating an ultra-luxury environment with extravagant all-inclusive race weekend packages for the fans. Although, as predicted, all this investment will be recouped and will start paying dividends soon.

Instead of acquiring a $15 to $55 million fee from venues, F1 will now be collecting all revenue from ticket sales, sponsorships, luxury hospitality, TV rights, and more. This will not only earn them a cool $500 million if not more. If everything runs smoothly and according to plan, F1 will make good money for the next decade as the Vegas GP is contracted for the next 10 years.

The company’s value has already increased to $10 billion, a hefty $5.6 billion since 2016. Perhaps why Saudi $20 billion offer was not even an option. Going forward, if F1 becomes promoters for most of the races, $20 billion will be chump change.

The promotions and preparation for the race are already underway. It will be exciting to see how the Vegas GP turns out.

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