Formula One Management admitted the Las Vegas Grand Prix fell short of its financial expectations last year.
However Formula 1’s commercial rights holder Liberty Media is introducing changes for this year which it believes will add value to the newest addition to the calendar.
Chief accounting officer Brian Wendling noted the event’s under-performance during a conference call with investors last week. “The Las Vegas Grand Prix did miss expectations, primarily on ticket sales,” he said.
This had a negative effect on F1’s earnings and the payments it made to the 10 teams.
“We saw strong growth in Paddock Club revenue at most events in 2024, as well as increases in freight and licensing,” Wendling added. “This was offset by softness in certain hospitality offerings at the Las Vegas Grand Prix.”
Although F1’s total payments to teams rose from $1.215bn (£950m) in 2023 to $1.266bn (£990m) last year, it fell as a percentage of the series’ operating income, Wendling noted.
“Team payments as a percent of pre-team adjusted OIBDA (operating income before depreciation and amortisation) was 61.5% in 2024, down from 62.6% in 2023,” he said. “The majority of the miss that you guys are calculating based on the team payment was Vegas-related,” he added.
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Team payments are a sensitive subject as the 10 existing competitors resisted the addition of a new team as they did not want to risk diluting their earnings. However Cadillac is expected to join the grid as an 11th team next year.
FOM invested heavily in setting up its showpiece race which runs along the Las Vegas Strip. It spent almost $300 million on purchasing and developing land in the city to host the grand prix.
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Derek Chang, who took over as Liberty Media CEO at the beginning of the year, said the series had reacted quickly to the shortfall in earnings from last year’s Las Vegas Grand Prix and will make changes to the ticketing arrangements for the 2025 event as a result.
“The economics for Vegas missed internal expectations on revenue and OIBDA,” he said. “The team has moved very quickly, however, to enact changes that will benefit 2025 and support a financially successful race for F1 and continued growth and positive impact for the Las Vegas community.
“We now have two years of real data to understand what tickets and products sold well, the demographics of the fanbase and the overall cost structure of the event. As a result, we are making further revisions to the ticket product and pricing strategy, leveraging this data, and as importantly, we are actively managing our cost structure. Given the halo effect to F1, we reorganised the structure of LVGP last month to integrate it fully into our London team and maximise those continued benefits.
“This change leverages the strong organisation we have in London today across commercial, finance, and more. At the same time, we are bolstering certain parts of the local Vegas team. This includes bringing the ticketing sales function back in-house and offering a high-touch, on-the-ground presence, which was a key learning from last year. We will continue our partnership with Quint and benefit from their expertise in VIP hospitality and F1 Experiences. Finally, we are also bolstering our partnership with local players.”
F1 made changes to ticketing after its inaugural Las Vegas Grand Prix, adding a “general admission” offer for the first time last year. Despite the race falling short of F1’s expectations last year, Chang said it has been a “huge success” for the series overall and contributed to its popularity growth.
“To put on an event like that in the short amount of time that our teams in Denver and London were able to do over the last couple of years has been pretty impressive,” he said. “We’ve talked at length about the benefit to the F1 ecosystem as a whole, whether it’s the media, the sponsorship, fandom growing here in the US, all that sort of stuff has been hugely impacted by what we’ve been able to accomplish in Las Vegas.
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“I think we all here were disappointed by some of the financial metrics in the early going here. But those, in my mind, are all durable and fixable.”
F1 originally announced a three-year deal to race on the Las Vegas Strip Circuit, which expires this year. However it has already gained permission from the city to continue racing on the city’s roads until 2032.
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