CEO Apologizes as Las Vegas Grapples with Disruptions from Inaugural F1 Grand Prix, Promises $1.7 Billion Boost
Posted on: November 14, 2023, 02:08h.
Last updated on: November 16, 2023, 12:58h.
The chief of the F1′s parent company last week issued a public apology to Las Vegas for the many challenges its residents have endured over the past eight months as the Strip slowly transformed into a racetrack for this weekend’s inaugural Las Vegas Grand Prix.
“I want to apologize to all the Las Vegas residents, and we appreciate that they have their forbearance and their willingness to tolerate us,” Greg Maffei, CEO of Denver-based Liberty Media, told KVVU-TV/Las Vegas.
Not only did Maffei misperceive the tolerance felt by hundreds of thousands of the Las Vegas residents negatively impacted by F1’s preparations, but he also continued his statement by implying that the revenue brought in by F1 would somehow benefit them.
“We’re going to bring something like $1.7 billion of revenue to the area,” Maffei said, “so it’s not just for the benefit of fans who want to view (the race).”
The math on Maffei’s $1.7 billion estimate simply doesn’t pencil out. With an estimated 105K visitors streaming into town specifically for the race, they would need to spend more than $16K each. While its true that F1 caters primarily to the wealthy, most people who visit Vegas for sports events spend $1,500-$3,000, not five times more than that.
Whatever the final economic impact is — and we won’t know for sure until the Las Vegas Convention and Visitors Authority releases its annual report sometime early next year — who exactly will benefit from that impact? And who will foot the bill for the incidental costs associated with construction, such as the millions in lost small business revenue and the doubled and tripled daily commute times experienced by nearly every Strip casino employee?
Who Will Benefit
Liberty Media, the planet’s most valuable sports empire at an estimated $21 billion, will likely grab the lion’s share of the revenue. That may seem fair after spending an estimated $400 million on the land and construction of a permanent F1 pit facility.
However, Formula 1 also seeks to have $40M of the $80M spent on circuit infrastructure paid for by Clark County taxpayers. So far, the county commission hasn’t voted on the issue.
Casino executives, especially those whose bonuses are tied to revenue, will also benefit handsomely. The stockholders who ultimately own those casinos will also benefit from the bump in their portfolio valuations.
Some front-facing casino employees, such as VIP hosts, will likely benefit from the unusually large tips left by some millionaires and billionaires they serve.
Unfortunately, the three days of prosperity showered on a limited number of people/entities and aren’t likely to trickle down to most people suffering the most from this process.
“It’s the small businesses around the area … and the individual employees who don’t have the same level of financial resources that these major companies do … they’re the ones getting hurt the most,” said YouTuber and frequent Casino.org contributor Jacob Orth in his latest video about F1’s true impact on Vegas. “They’re the ones who have been most negatively impacted economically.”
Who Won’t Benefit
For eight months, restaurants around Las Vegas, especially those between Sands and Harmon avenues on the Strip, have suffered fewer diners, forcing them to cut staff hours, which throws some very real families into financial instability.
Last week, the owner of Battista’s Hole in the Wall at the corner of Flamingo Road and Linq Lane told the Las Vegas Review-Journal that his business plummeted from an average of 550 dinners a night to 450, with only 100 reservations so far booked for Friday through Sunday.
I understand, as small businesses, we might need to take it in the shorts a bit if it’s better for Las Vegas as a whole,” owner Randy Markin told the newspaper. “But I would have liked for the F1 people to at least come by and say, ‘We’re sorry this is impacting you so much. Can we do something to help?’
“And to think we’re going to be doing this for 10 years.”
Likewise, the Arco station at Flamingo Road and Koval Lane has seen gas sales totaling 200 gallons on some days, down from the normal daily average of 5,000-6,000 gallons.
F1 is saying we are going to make this money back up, but how are we going to make it back up if within one day we lose thousands of dollars and they expect us to make it back within the period the race goes on?” Kalani Badayos, the station’s assistant manager, told KVVU-TV/Las Vegas.
And can the light at the end of the tunnel for taxi drivers, who have sat in traffic for eight months with fewer fares per night, genuinely be just a $15 surcharge that will automatically be included in their fares between the Strip and the airport from November 15-21?
“Vegas is no stranger to big events, but a big event that causes this much disruption in this many people’s lives for this long a period of time — and has hurt them economically and financially this much — is rare, and this is not something people are going to want to go through again anytime soon,” Orth said in his video.
Clark County approves the F1 Grand Prix in Las Vegas for 10 years, though its current contract calls only for three.
Maffei finished his statement to KVVU by adding: “We hope this is the most difficult year with all the construction that went on, and things will be easier in the future.”
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