There’s never been a race more hyped in Formula 1 history than the Las Vegas Grand Prix.
The race will be the crowning achievement of F1 owner Liberty Media, the American company that took over from the Bernie Ecclestone-fronted CVC Capital Partners in 2017.
It will also be the keystone race in the sport’s United States revival.
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Only 15 years ago Formula 1 was dead to the USA.
Knowing how the sport first flatlined in the world’s largest consumer market is key to understanding its remarkable resuscitation — and whether this year’s race can possibly live up to the hype.
LOVE AND BETRAYAL
You might think one nation hosting three grands prix is a sign of the Americanisation of the sport under Liberty Media, but you’d be wide of the mark.
The United States has held three races in a season before — in 1982, when the country was in the throes of an F1 love affair.
The relationship was built on the confluence of two key characters.
One of them you’d know: Mario Andretti, the American racing icon who’s won practically everything he’s entered, including the Formula 1 world championship in 1978.
The other might be less familiar: Chris Pook, an English travel agent based in California who thought there’d be value in running a Monaco-inspired street race on the streets of Long Beach, in coastal southern Los Angeles.
The Grand Prix of Long Beach inaugurated the United States West Grand Prix in 1976, complementing Watkins Glen in the east.
It was a modest success at first, but Andretti’s victory in 1977 turned the race into an institution.
California arrived at the right time for F1. The sport was rapidly professionalising thanks to the commercial nous of Bernie Ecclestone. Money was flowing. A previously niche and gritty sport was becoming glamorous.
The 1982 season was the high watermark. Watkins Glen had faded, but Detroit and Las Vegas had joined the calendar to give Stateside fans three races in one year.
But Ecclestone’s business model was aggressive. With F1 in the ascendancy, he was focused on extracting top dollar from his cash cow, even from venues like Long Beach, where the sport was deriving more value than money alone.
Pook’s race couldn’t afford Ecclestone’s escalating fees. He asked for a reduction, playing Bernie off against the domestic CART series, which was offering friendlier financial terms. Ecclestone attempted to call the bluff. Pook signed with CART.
That was 1982. The last race was held in 1983.
Long Beach went from strength to strength from 1984, with Mario and then son Michael Andretti winning the first four CART races between them to secure the event’s long-term future. It’s now the longest-running street race in the United States, still held annually for IndyCar.
But F1’s hold on America was wobbling.
The sport went from sustaining three races in 1982 to just one by 1984. It jumped from Detroit to Phoenix in 1989, and by 1991 F1 had run out of steam and left the country.
It took eight years to return, this time at the heart of American motorsport, the Indianapolis Motor Speedway, in what should have been a slam dunk success.
More than 200,000 people turned up in the first year, but it took only until 2005 for the sport to burn them.
A monumental series of political failures resulted in the farcical six-car ‘race’ after Michelin-shod cars were left unable to enter the grand prix due to safety concerns.
The audience halved, and F1 left the United States two years later without a clear way back.
WHAT WENT WRONG?
F1’s original United States boom, highlighted by the iconic race in Long Beach, is too often forgotten in a rush to paint the USA and Formula 1 as somehow incompatible, as though Americans can’t understand European open-wheel racing.
What is fair to say, however, is that F1 isn’t integral to the landscape of the world’s largest sporting market.
Shown insufficient love, would-be fans had more than enough alternatives to busy their weekends without Formula 1.
In short, Formula 1 got greedy.
We saw that same attitude even in the early days of the new United States Grand Prix in Austin.
COTA was proposed in 2010, but before the doors had even opened the project was thrown into doubt over Ecclestone’s eye-watering sanctioning fees. The circuit teetered on the brink of financial oblivion for several seasons after its 2012 launch, threatening what ended up as the sport’s Stateside home.
You might also remember plans to run a race on the banks of the Hudson in New Jersey, where New York City would have formed a spectacular backdrop. Despite being backed by the then New Jersey governor, it collapsed under the weight of Ecclestone’s financial demands.
In this sense the history of F1 in the United States isn’t so different to the story of the sport in India, South Korea, Turkey and, to a lesser extent, Malaysia: venues set up at great expense for massive short-term gain but with limited or no work to establish a legacy that might make the events sustainable over time.
The United States market was ripe for Formula 1 with only a little cultivation.
ENTER LIBERTY MEDIA
Since Liberty Media has taken the reins, however, the approach to the Untied States has been different.
Rather than attempting to squeeze maximum cash flow from the races, Formula 1 is taking a direct stake in the success of the events for the first time in the sport’s modern history.
The Miami Grand Prix is a joint venture with Stephen Ross, the owner of the Hard Rock Stadium around which the race is run.
The Las Vegas Grand Prix is a fully F1-underwritten operation.
The sport is putting its money where its mouth is to carve out a place in the US sporting landscape for Formula 1.
In the case of Vegas, investment has been enormous.
To the end of September, F1 had spent around US$435 million (A$684 million) in capital expenditure, including a brand-new pit building, paddock zone and other preparation for the six-kilometre track. That’s already US$35 million (A$55 million) more than forecast as recently as August.
“We did incur significant expense in launching year one in Vegas,” Liberty Media CEO Greg Maffei said in a call with Wall Street analysts, per Autosport. “And that included extra provisions for safety, security and traffic planning, which was required by local regulators.
“And we had several non-recurring items; for example, our first-year-only opening ceremony, and the design and launch of our multipurpose app, and creation of a fan database.
“We remain highly confident in the increased efficiency to operate there and our growing profitability in years two and beyond, and we remain bullish on the broader value creation at LVGP that far outweighs the increased investment and start-up costs.”
In fact Maffei has predicted Vegas could end up as one of the sport’s five most profitable races — which would be remarkable considering the fees reportedly earnt from the four races in the Middle East as well as from Azerbaijan.
Regardless of whether those lofty profit predictions come true, the forecast itself points to the potential benefits on offer when the sport risks investing in the success of its own events rather than just pocketing an escalating sanctioning fee.
The same argument can be made for many of the sport’s other marketing initiatives, Drive to Survive being the highest profile example of F1 venturing out and making more than it would have put in. Many would say the series has underpinned much of F1’s recent success.
It’s not a model that would work in every market. Some races today certainly pay far higher fees than could ever realistically be recouped under this structure. You can probably imagine which those are.
But in an enormous sports market like the United States, where the massive sports-engaged population should always have been an easy target, it’s proving a lucrative approach.
CAN YOU HAVE TOO MUCH OF A GOOD THING?
That’s not to say it’s been all smooth sailing, however.
Apart from rising set-up costs, the inaugural Las Vegas Grand Prix is also being dogged by stories of lacklustre ticket sales. It’s deeply incongruous with so many other sellout races this season as well the level of hype the sport is building for the event.
Ticket sales have been so slow that Formula 1 has ripped an entire grandstand out of the map, supposedly for “sightline” reasons. Ticketholders who had bought seats in that grandstand have all been accommodated in more expensive seating.
You can read that two ways: the grandstand sold so few tickets that patrons were easily moved elsewhere, and other grandstands also have room to absorb more fans.
One analysis of Ticketmaster’s ticket reserves estimated there were more than 10,000 unsold seats as of Friday, less than a week before cars hit the track for the first time.
You might remember that when tickets were first announced, the asking prices were almost embarrassingly high. Hotel prices were similarly inflated. Presale nonetheless sold out almost instantly.
But it seems enthusiasm tempered afterwards.
According to CNN, the average grandstand ticket has plunged from around US$2000 (A$3140) to around US$1000 (A$1570), having declined by 35 per cent in the last month alone to try to get people through the door. Thursday and Friday tickets have dropped by 50 per cent and 60 per cent respectively.
A similar trend has been reported for hotel prices, which have collapsed from stratospheric levels to in some cases below average weekend prices, per CBS.
The working theory is that the average punter might’ve been willing to buy a marked-up ticket, but if they couldn’t then pay the exorbitant hotel prices, they ended up buying neither.
It’s therefore not surprising to see prices for both plummet — though you’d hate to be someone who paid top dollar for a seat only to discover the fan sitting next to you paid a bargain-basement price. One wonders how that might affect goodwill and future attendance.
“We are certainly going to be looking at our hospitality offerings and whether we want to maintain the same structures or whether we want to move them around,” Las Vegas Grand Prix CEO Renee Wilm told Racer.
“We call it hospitality Tetris. Do we do we change this to GA? That has been one complaint that we have heard loud and clear, we will act upon next year, and that is having more GA for our fan base.
“We’ll go back to that ticket price point, and trying to get more fans to be able to enjoy the race weekend.”
There are also bountiful stories of locals unhappy about disruptions to their city — though that’s par for the course at any central street circuit.
WHAT DOES THAT MEAN FOR THE CALENDAR?
There’ll also be some who will argue that the United States simply doesn’t deserve three races, particularly when Las Vegas is clearly an image-driven event rather than one focused purely on the racing spectacle, even if F1 insists it’s done as much as possible to make sure the track delivers some action.
But that argument ignores the pure arithmetic of population.
Consider the per capita race numbers on the roughly continental basis outlined below.
Continental share of grands prix
Europe: 75.2 million people per grand prix.
Middle East: 85 million people per grand prix (Arabian Peninsula: 21.5 million people per grand prix).
North America: 116 million people per grand prix.
South-East Asia (including Oceania): 368 million people per grand prix.
South America: 422 million people per grand prix.
Asia (excluding South-East Asia): 1.82 billion people per grand prix.
Africa: no grands prix.
Azerbaijan has been included in Europe’s group of races, if for no other reason than it once carried the European Grand Prix moniker.
Europe remains comfortably ahead of any other continent in terms of races to population, with North America a distant third. The United States alone, with a population of 330 million people, has a similar breakdown as the entire North American continent all on its own.
Consider too that Las Vegas is more than 1700 kilometres from Austin, and Austin is almost 1800 kilometres from Miami. It’s only 1500 kilometres from Silverstone to Budapest, between which are another seven grands prix.
WHAT’S THE BAR FOR SUCCESS?
With all that said, what will it take to declare this weekend a success?
The bar is much lower than you’d think.
In every situation bar an absolutely gargantuan logistic or execution blunder, Formula 1 will wake up the morning after the grand prix a winner.
It will have done what no sport has ever achieved by shutting down the Strip and moulding Las Vegas into a grand prix circuit.
Television pictures will be spectacular — of the city, of the cars and of full sections of grandstands.
The race itself won’t have to be a thriller. The highlights and newsreels will be sufficiently visually arresting for the action not to really matter.
And the pit building has a giant glowing F1 logo on its roof, ensuring no-one will be in any doubt about who was here and put the event together.
The bigger question is whether the event will be a long-term success.
Will fans who feel ripped off return next year? Will viewers who watch what some predict will be an ordinary race be motivated to shell out costly tickets in 2024? Will local residents see value in two more contracted years of disruption?
We know F1 is determined to turn Las Vegas into a tentpole event, but it’s impossible to answer that question today.
All we can be certain of is that the sport will take 50 victory laps of Las Vegas this weekend.
The future can wait until after the hangover.
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