Last November, the inaugural Formula One (F1) Las Vegas Grand Prix came and went with much fanfare, exceeding economic expectations and providing a glimpse into the potential future of the city that has quickly become a sports destination.
However, now that the race has passed, multiple stakeholders in and around Las Vegas are growing concerned about the future of the event—perhaps the most vocal is Clark County Commissioner Tick Segerblom, who recently voiced frustration at the lack of transparency with the process.
In an interview with the Las Vegas Review-Journal, Segerblom made it clear that the county “never signed a contract” with F1 parent company Liberty Media—instead, the agreements were signed with the Las Vegas Convention and Visitors Authority (LVCVA).
Because of this, Segerblom asserted that the county “never committed to three years,” as has been widely publicized. Segerblom went on to say that he had included discussions about the race on the agenda for the commission’s next scheduled meeting, but that was then pushed back after the initial story was published.
“It is anticipated that the agenda item for Board discussion on F1 noticed for next Tuesday will be held for a future meeting in the coming weeks to align around the County’s public debrief of the event and the structure for facilitating future races,” County spokeswoman Jennifer Cooper said in an email to the Review-Journal.
According to the contract between the LVCVA and Liberty, the authority is obligated to pay $6.5 million per year towards the race annually through at least 2025, but both sides have said several times that the intention is to extend the deal far beyond that starting point.
The commission, for its part, recognized the race as an annual event, but didn’t sign any contract mandating that it actually take place, Segerblom said. The recognition gives freedom to the commission to waive certain ordinances without the need for additional meetings, so long as the race is held the week prior to the Thanksgiving holiday.
Segerblom is not the only commissioner to voice frustrations over the idea that the county was not properly consulted at various points during the lead-up to the race and its setup process—Commissioner Marilyn Kirkpatrick was also very vocal about her dissatisfaction when it came to things like impacts on commuter traffic and a lack of considerations for Strip workers.
“I think it’s one of those things where the tail is wagging the dog and we’re the dog, so let’s stop tail wagging and take over,” Segerblom told the Review-Journal.
F1 has asked Clark County to reimburse half of the $80 million it accrued in infrastructure costs for the event, but no agreements are currently in place. Betsy Fretwell, COO for the Las Vegas Grand Prix, released a statement to the newspaper saying that her team “meets regularly with local government representatives to refine and improve our coordination.”
“Similarly, we are working with the LVCVA and community stakeholders to enhance communication, planning and coordination for the event,” she continued. “We are committed to keeping all lines of communication open with our race partners at the County and throughout the local community.”
Race officials have promised that future races will be “substantially” less arduous, given the extensive work that has been done already.
Another figure who recently spoke about the need for change with regard to the race was Tom Reeg, CEO of Strip operator Caesars Entertainment. On the company’s recent fourth-quarter earnings call, Reeg told analysts that the event should offer more affordable ticket prices and cater to some of the smaller properties if it wants to garner support and lasting power.
“In prior quarters, we talked about F1 being a big stimulator of demand for us and we’ve been talking about a 5 percent lift in EBITDA in the quarter, but our actual experience was about a 4 percent lift, pretty close to what we were expecting,” Reeg said, as reported by CDC Gaming Reports. “It was a huge lift for the high-end properties, including Caesars Palace and Paris. For our mass-market properties, it was less so.”
The race, which catered primarily to international high-rollers, was widely criticized by local and domestic F1 fans for being too expensive—on sites such as StubHub, one-day tickets were in excess of $500 and three-day passes were typically over $2,000.
Additionally, several business owners on and around the Strip have since said that the construction and diverted traffic actually ended up costing them millions of dollars in lost revenue, with some even threatening potential legal action.
Per CDC, Reeg said on the call that the race “will be a better event when more of the city is energized and not just the four or five buildings that garner most of the benefit.”
“We’re working with our partners in the city and with F1 to make sure it’s a more broadly successful event next year than it was this year,” he continued.
Jeremy Aguero, principal of Applied Analysis, said that travelers spent a total of over $550 million during the week of the race—those who attended spent an average of $4,128, while those who did not spent an average of $2,662. In total, approximately $64 million in tax revenue was generated, Aguero estimated.
