Formula 1 Group and Liberty Media, with the upcoming inaugural Las Vegas GP, decided to adopt a very unique business model. As they invested $500,000,000 for the upcoming race, they chose to go with an unconventional method to garner maximum revenue.

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F1 is a very ‘asset-light’ business where they themselves don’t own the teams, the cars or the race tracks. Interestingly, they don’t even organize the races themselves. The way they run the sport by earning a massive amount of revenue, without taking sole responsibility for any race is actually very fascinating.

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F1 mainly makes a profit through sponsorships, media rights, and race promotions. As they don’t own the circuits, they collect fees from race tracks all over the world. With a huge number of people flooding the circuits, F1’s revenue keeps adding up.

How did F1 play a masterstroke with Las Vegas GP?

As the race promoters are happy to pay the price, Formula 1 and Liberty Media in Las Vegas will try a new way to generate maximum revenue. They decided to invest $500 million in the race instead of just taking a comparatively small $50 million fee like they would usually do by not spending any money themselves. By making this investment, they became the race promoters themselves.

By becoming promoters now, they will be in charge of ticket sales, luxury hospitality, sponsorships, merchandise, parking, concessions, etc. Through this, experts believe that they will garner way more than just $50 or $55 million in revenue.

According to Joe Pompliano on LinkedIn, each racetrack pays the F1 group a sum of about $15 million to $55 million depending on their revenue generation. And the amount F1 will collect from Las Vegas is expected to be more than these regular collections. On top of this, F1 has managed to secure the Las Vegas GP’s place on the calendar for the next 10 years.

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The most awaited event of this season

The upcoming Las Vegas GP is the latest addition to the Formula 1 calendar. This being the third American race on the calendar makes it one of the most awaited outings of 2023.

Given how eventful and glamorous Las Vegas is, fans can’t wait for Max Verstappen and Co. visits to visit the Sin City in November this year.

Notably, F1 introduced the third race in the United States only because of the sport’s growth in the country. However, it’ll be interesting to see how much revenue the race  generates and in the end.

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