Work to get the streets of Las Vegas ready for its first F1 GP race in November has driven costs to $ millions over the original projections.
Liberty Media, the Denver-based company that owns the Las Vegas Grand Prix (LVGP), provided the update during its quarterly earnings call Friday, where Principal Financial Officer Brian Wendling told investors the increased costs were to “ensure quality” for spectators.
“We expect capex related to the Vegas race, including both the paddock building structure and track related capex, to be close to $400 million, of which approximately $155 million was incurred in the first half of the year,” Wendling said during the Friday call. “There’s no change to our revenue and profit expectations for the race in year one.”
Construction crews hit the pavement in early April, around the time LVGP CEO Renee Wilm indicated logistical problems ensued while digging up roads, undergrounding utilities, and building the 300,000 square foot start and finish line to the November race: the paddock building.
“As we’ve uncovered asphalt, (there were) cables under the ground that needed to be addressed. There’ve been wires overhead that have needed to be moved,” Wilm said during the call.
She told investors that hotels, casinos, and other businesses along the circuit expressed concerns about how this construction and race day events would impact their customers.
“A lot of (the increased costs were) driven by the request, and quite honestly requirements, of the local stakeholders, as we began this process of preparing the track for actual usage,” Wilm said during the call. “This has led to additional equipment that was needed, as well as additional, actual roadwork.”
“We moved with lightning speed, the F1 team, Renee’s team, to put this in place. And that’s probably led to increased costs. And it’s also meant there were opportunities we’ve had to not capitalize on,” Maffei said during the call.
With an estimated $400 million project estimate, Formula One President & CEO Stefano Domenicali told investors he still projects around $1.2 billion in revenue from the November race in its first year.