Why F1 Has Won Big in Vegas 🏆 🎲
Why F1 Has Won Big in Vegas 🏆 🎲
Plus UFC comes to the Vegas Sphere and Federer's shoe brand is beating Nike and Adidas.
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Would you place a $650m bet in Vegas and hope to come out a winner?
Well, that’s exactly what F1 bosses did when they added the Las Vegas event to their calendar. As we enter the Vegas Grand Prix weekend, has F1’s biggest bet paid off?
$650m refers to the estimated amount of money that, according to Forbes, F1 invested in various projects to realize this event. This includes purchasing a large patch of land on the strip for a permanent pit area and changes made to the streets to allow high tech cars to travel at over 200mph along the strip.
That being said, the first practice session of the weekend ended after 9 minutes due to loose drainage covers on the track. Perhaps it wasn’t all money well spent.
This little slip up is understandable. F1 doesn’t normally make these investments itself. Usually, third party promoters or the owners of circuits make the upgrades and hope to recoup the investment through ticket income and concession sales. In fact, all of the other circuits actually pay F1 an additional race hosting fee for the privilege of being able to have F1 cars on their track or in their city.
In Vegas, F1 will not get a race hosting fee and has dug deep into its own pockets to bring this event to life.
Two questions remain… Why? And will it be worth it?
The first answer is quite simple. Under Liberty Media, F1 has become more popular in the U.S. and the owners are hoping to cash in on this hype by creating more spectacular events in increasingly spectacular locations. To position itself as the main beneficiary of this hype, F1 has decided to take on the hosting duties itself. If successful, expect F1 to pay for more future events.
So, how does F1 measure success? Well, in 2018, Liberty Media said that F1 was all about selling ‘glamour and parties’. Translated, this means that F1 will be hoping to sell lots of expensive tickets and entertainment packages.
On that front, things appear to be going well:
3-day grandstand tickets have sold for $1500+. That’s double the average for the Austin GP.
Access to the Paddock Club, a newly built VIP area next to the pit lane, will set you back $15,000.
The top package at Caesars Palace was sold for a whopping $5 million. It includes a terrace overlooking the race, a private Michelin star meal and a Rolls Royce with a driver.
F1 will receive around $50k from each bar along the strip that will have a view of the race.
F1 should see a nice return from Las Vegas in 2023, but this is also an investment for the future. Las Vegas will host F1 for at least three years, with the local council already extending permission until 2032 if F1 wants to continue. That decision will rest on whether Sin City keeps paying out for Formula 1.
🔮 UFC to host fight in Las Vegas Sphere.
Formula 1 isn’t the only sport trying to make it big in Vegas.
According to UFC chairman Dana White, the MMA series will host a fight in the famous Las Vegas Sphere at some point in September 2024. White promises to use the Sphere’s unique technology to create the “greatest live combat sporting event ever”.
Elsewhere the NFL is reportedly looking into hosting the 2024 draft inside the venue as well.
The Sphere’s owners, Madison Square Garden Company, will hope that interest from sporting events continues as it was recently revealed that simply running the dome for its first three months has cost more than $100 million.
👟 How On Running is beating Nike, Adidas and Puma.
It has not been a good few days for the traditional sports shoe brands.
Nike just missed an earnings prediction by $40m (although share prices increased by 8%)
Adidas announced a revenue drop of 6%
Puma reported a weaker than expected third quarter, while Under Armour had a sales drop of 1%.
While the big brands faltered, an emerging rival from Switzerland has made a big statement. On Running, which is part owned by Roger Federer, saw its net sales increase by 46.5% from the previous year to $540 million.
Much of this increase can be tracked to the Americas region, where sales increased more than 60% and hit $292 million.
On’s recent success can be traced to two factors. Sporting success and tech bros. On has partnered with several high profile athletes, including Federer and Iga Świątek. It has also found big success in marathon running, being on the feet of winners at both Boston and New York.
Outside of sport, On has embraced a beefier look for its more commercially available sneakers and done a successful partnership with the fashion label Loewe. This has helped the brand connect with a wider audience, more specifically tech bros in Silicon Valley.
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