The Formula 1 circus lands on the Vegas Strip this weekend for the second annual Las Vegas Grand Prix.
Last year’s race was plagued by complaining residents and businesses over traffic, city obstructions, and a race track that damaged Carlos Sainz’s Ferrari when a manhole came loose, requiring a very expensive repair. Nonetheless, the actual race was quite exciting, and screaming F1 race cars created the look and feel that Las Vegas, and F1 owner Liberty Media, hoped to create.
With a more tightly contested championship among drivers and teams at the top this year, the anticipation is growing.
Liberty Media’s (FWONK) gamble on the US, and in particular Vegas, where Liberty has spent a whopping $600 million to develop for a 10-year race deal, appears worth taking.
While experts predict this year’s race will pull in slightly less than the $500 million or so in revenue for Formula 1 and the $1.5 billion in Las Vegas economic impact achieved in last year’s race, the contest and its weeklong festivities will still be a boon for all those involved.
The 300,000 or so attendees expected for the race tend to spend nearly four times as much as regular Vegas visitors, the city said.
And that’s good for F1, the city, and, of course, the teams that actually do the racing.
“It’ll be bigger and better than last year,” Williams F1 team principal James Vowles said to Yahoo Finance.
“There was some teething issues; that’s fairly normal when you’re trying to put together the scale of operation that Formula 1 is, and you have to say that the three US races, but especially Las Vegas, it is just this jewel in the crown of what we have across the whole calendar, and it could be that we have a championship decided this weekend. So it’s … sort of excitement that brings it all together,” Vowles added.
BWT Alpine F1 team principal Oliver Oakes believes Liberty Media is the main driver behind F1’s recent success in Vegas and the sport overall in the US, which really emerged during the pandemic and following the release of the Netflix F1 series, “Drive to Survive.”
“[Liberty Media has] done an amazing sort of job bringing the sport to everybody. I think everyone talks about ‘Drive to Survive’ and the effect that’s had, but actually I think it goes much … wider than that,” Oakes told Yahoo Finance. “You can see now every event in F1 is a three- or four-day weekend, whether that’s sprint races thrown in, whether that’s concerts on event, it’s fantastic. And they’ve been the ones driving this growth.”
Both Williams and Alpine are interesting stories in F1 this year. Neither team is fighting for the championship; they are “midfield” fighters this year, with Alpine leapfrogging Willams after a surprise double-podium race finish last week at Interlagos in Brazil.
While Alpine might be higher up in the rankings, or Constructor Standings as F1 calls them, Williams is ascending.
The team has signed a number of high-profile partners in the last couple of years, with Duracell (BRK-B), Gulf Oil, Michelob (BUD), and Broadcom (AVGO) among the big names. The team signed Japanese industrial giant Komatsu (KMTUY) and Latin America e-commerce site MercadoLibre (MELI) this year, as well as re-signing energy company Gulf Oil.
The team is also majority-owned by US-based private equity firm Dorilton Capital. Vowles believes Dorilton is an asset for the team, surprising given the reputation of sharp-elbowed PE operators.
“This is not what I would call traditional private equity; this is not about getting a multiple and selling out. This is about bringing a team back to where it deserves to be, winning world championships,” Vowles said about the team’s ownership structure.
Vowles added that he has learned a lot from Dorilton on how to transform an organization from the ground up, and the VC firm has provided Williams with investments it needs both now and for funding projects that may take years to pay off. Vowles also said, surprisingly, that he speaks to Williams’ board of directors almost every day.
Alpine F1 is another interesting story. The team is majority-owned by French automaker Renault (RNLSY), and the name Alpine refers to Renault’s storied performance brand. But the team is in the midst of a transformation too. It has taken on new ownership in the form of big celebrities and sports icons like actor Ryan Reynolds, NFL quarterback Patrick Mahomes, and top golfer Rory McIlroy.
The team also decided to no longer build its own engines and will instead get its engine supply through Mercedes, which Williams F1 does as well.
The changes at Alpine have led to rumors that the team is up for sale, with suitors like GM reportedly knocking at the door.
Though he didn’t directly deny that the team was for sale, similar to Williams’ Vowles, Oakes believes the right structure and ownership are in place.
“I think actually people can really see now that the backing from Luca [De Meo, Renault CEO], from the group, the sort of direction we’ve taken with going out to get the best engine, to put the team really, front foot forward and climbing back up the grid — I think it’s exciting times for the team,” Oakes said.
“You know, for the first time, I think there’s some real leadership there as well and real support, so it’s looking good for the future,” he added.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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