Mixed results for the 2024 Las Vegas Grand Prix
The F1 race in Las Vegas is the only one where the championship acts as both promoter and host. Russell triumphed and a record audience was set. However, the economic consequences are disappointing but not catastrophic.
George Russell won the second edition of the Las Vegas Grand Prix in front of an impressive global TV audience of 56.1 million viewers. Despite this audience success, Formula One Management (FOM) acknowledged that the 2024 edition did not meet its financial goals, hinting at challenges for the future of this ambitious race in the heart of the Strip.
If the breathtaking debut in 2023 had created a buzz, the overall economic impact and ticket sales for 2024 have seen a decline. They were already not meeting expectations in 2023. According to a study conducted by Applied Analysis, the economic impact has decreased from $1.5 billion in 2023 to $934 million (approximately €873 million) in 2024.
The Chief Accounting Officer of Liberty Media, Brian Wendling, highlighted the underperformance of the event, particularly regarding ticket sales, during a conference call with investors last week.
Ticket sales have indeed slightly decreased, going from 315,000 in 2023 to 306,000 in 2024. Nevertheless, visitors spent an average of $2,400 (excluding tickets) during the race week, generating $45 million in revenue for the state of Nevada, of which $15.5 million was allocated to local schools. Liberty Media is implementing changes this year that, according to them, will increase the value of the new addition to the calendar.
The Las Vegas Grand Prix did not meet expectations, primarily in terms of ticket sales, Wendling stated. He specified that the significant increase in Paddock Club revenue from other events and the rise in transportation and licensing were offset by the decline in certain hospitality offerings at the Las Vegas Grand Prix.
Despite these challenges, FOM is investing heavily in this flagship race with nearly 300 million dollars for the acquisition and development of land. Derek Chang, the new head at Liberty Media, announced corrective measures for the 2025 edition.
« The economic results of Las Vegas did not meet internal expectations in terms of revenue and OIBDA (operating income before depreciation and amortization), Chang acknowledged. « However, the team acted very quickly to implement changes that will benefit 2025 and support a financially successful race for F1 as well as continuous growth and a positive impact for the Las Vegas community. »
Modification of the pricing offer and strengthening ties with local stakeholders
Chang then provided more details regarding the economic management of the event as well as the strengthening of ties with local stakeholders.
« We now have two years of actual data to understand which tickets and products sold well, the fan base demographics, and the overall cost structure of the event. Consequently, we are making new revisions to the ticketing and pricing strategy by leveraging this data. Equally important, we are actively managing our cost structure. Given the halo effect of F1, we reorganized the LVGP structure last month to fully integrate it with our London team and maximize these ongoing benefits. […] We will continue our partnership with Quint and benefit from their expertise in VIP hospitality and F1 experiences. Finally, we are also strengthening our partnership with local stakeholders. »
These changes include a revision of the pricing and ticketing policy, based on information gathered during the first two editions. The FOM will also rely on the expertise of Quint for VIP hospitality and strengthen its partnerships with local stakeholders.
The addition of a general admission offer last year reflects this willingness to adapt. Chang emphasized that despite financial difficulties, the race was a huge success for F1 as a whole and contributed to its growing popularity.
Lori Nelson-Kraft, Senior Vice President of Corporate Affairs at the Las Vegas Grand Prix, highlighted for The Atlantic the importance of the event: « The economic impact of the race in 2024, totaling $934 million, makes it the largest recurring event in Las Vegas, just behind our inaugural year and the Super Bowl. »
F1 announced the opening of Grand Prix Plaza, the permanent building that houses the pits and paddock, on March 29th. It will offer visitors an immersive experience with an interactive museum, F1 simulators, and a go-kart track using part of the Las Vegas Strip circuit. Discounted rates will be offered to residents to make Grand Prix Plaza an accessible asset all year round.
