The business of sports: Las Vegas' rise in the world of pro sports
Written by: Paul McGaughey
Sorry folks, but there are no longer any quiet weekends left on the Las Vegas calendar.
Hoping to be in bed at a respectable time after a pleasant day of sightseeing?
Good luck with that.
As the clock strikes midnight on November 18, global superstars Max Verstappen and Lewis Hamilton will be ripping through a street course at speeds of up to 212 miles per hour attempting to qualify for the inaugural Las Vegas Grand Prix.
The race itself, which will take place later the same day at 10 p.m. local time, is an ambitious endeavour by Formula 1 and the most recent sports property looking to capitalize on the glitz and glamour of Sin City.
When Formula 1 executives wanted to expand their presence on the continent – and with races already established in Montreal, Miami and Austin, Texas – they sought out what they describe as the “crown jewel of North America” and what they saw as the “pinnacle” location.
There are 23 stops on the 2023 circuit and the goal for Formula 1 has been to create a Super Bowl atmosphere at each race.
“I think [Las Vegas] call themselves the greatest arena on earth and we’re the biggest global sport that can come here each year and create a legacy,” Las Vegas Grand Prix chief commercial officer Emily Prazer told BNN Bloomberg.
“We're all looking at this as not just an opportunity to grow our brands, but to educate the market and to acquire new fans and make sure that people are starting to see what Formula 1 is all about.”
The three-day event is projected to have an economic impact of $1.3 billion USD for Las Vegas, double the amount of the Super Bowl that will be held in Las Vegas for the first time in February, 2024.
Liberty Media acquired Formula 1 in 2017 and appears to be all in on Las Vegas.
The Denver-based company spent $500 million to purchase land and construct a permanent paddock building for the Las Vegas Grand Prix and also chose, for the first time, to fully fund promotion of a Formula 1 race.
Liberty Media would not disclose their projected revenue for this year’s event, but acknowledged that the goal is to plant firm roots in Las Vegas.
“I think [this investment] really does demonstrate our commitment to the destination and what we're trying to build,” Prazer said.
“The building itself is spectacular, which everyone will see in due course. We're nearly finished. But what's really cool about it is that obviously it serves as the pit building during the race weekend, [but] then we'll be building essentially the home of Formula One in North America.”
For the approximately 100,000 spectators that will attend the race and the millions more watching on television (the total global audience for the 2022 season was 1.54 billion), Prazer says we are in for quite the treat.
“It's going to be stunning,” she said. “I think we're all anticipating what it actually looks like. I can't wait to see it.
“We've been working on this for such a long time. But we think the backdrop of Las Vegas Boulevard, coupled with the experience that we're creating in other areas, is going to be probably the most visually pleasing race on the Formula 1 calendar.”
Formula 1 sought out Las Vegas in this case, but for decades the city has essentially held the door open for major sports leagues and events to set up shop.
Boasting a visitor volume of 38.8 million people with direct spending of $44.9 billion US in 2022, Las Vegas has long been a market seemingly capable of supporting professional sports franchises.
Las Vegas mayor Carolyn Goodman (since 2011) and the previous mayor, her husband Oscar Goodman (1999-2011), both love sports and have been laying the groundwork for almost two decades on the recent arrivals of the NHL, NFL and WNBA.
Upon taking office, Oscar Goodman’s first call was to NHL commissioner Gary Bettman to gauge his interest in bringing hockey to the desert. In that era, however, leagues were timid about the presence of legalized betting in Nevada.
“I do recall that [Bettman] was not necessarily opposed to it, but of course he was in no position really to get on the bandwagon,” Mayor Carolyn Goodman told BNN Bloomberg.
In pursuing former NFL commissioner Paul Tagliabue and subsequently current commissioner Roger Goodell, the initial response was: “There’s just no way we’re going to do that.”
Fast forward to present day and with the general acceptance of betting on sports, the NHL was the first major league to arrive on scene with the expansion Vegas Golden Knights in 2017. The WNBA followed suit prior to the 2018 season when the San Antonio Stars relocated and became the Las Vegas Aces.
In 2020, the NFL’s Oakland Raiders were moved to Las Vegas and Major League Baseball’s Oakland Athletics are perhaps on the verge of making the move as well.
“I think if you wait a week, we can tell you,” Mayor Goodman hinted.
“They're having meetings. The ownership of all teams have to give its blessing. That has not happened yet. The fee to pay for the franchise move may cause a problem for them. I don't know. At this point, I think the stadium board and the governor and the legislature have approved a manner in which [a new] stadium can be funded and operative.”
Las Vegas has not just exploded onto the sports scene, but has also found success very quickly.
The Golden Knights entered the 2023-24 campaign as the defending Stanley Cup champion and the Aces recently captured their second straight title.
Furthermore, the Golden Knights are just one example of the financial success that can be gained by playing in Las Vegas.
Paying a $500 million expansion fee, the Knights were valued at $575 million with operating income of $53 million after just one season, according to Forbes. In 2022, the Golden Knights were ranked as the 16th most valuable franchise in the NHL at $965 million, marking a one-year increase of 36 per cent to go along with $64 million in operating income.
The Raiders have also seen a massive jump in franchise value since moving to Las Vegas, reportedly increasing from $2.9 billion in the team’s last season in Oakland to $5.1 billion as of 2022.
Mayor Goodman, who will be termed out next year, has long had another item on her wish list in what she describes as a “dogged pursuit” of an NBA team.
“This is 24 years of not if, [but] when. Why are you waiting? Let's get this going” is the message that is being sent to NBA commissioner Adam Silver.
Overall, Mayor Goodman is proud of what Las Vegas has accomplished and doesn’t want to miss a second of the action.
“I hate sleeping. I can do five hours and I'm awake saying: 'Gosh, I got to get down there. What is next? What's happening today?' And it's just wonderful. It's fun.”
A couple more weeks and there will be very little sleep for anyone as a very loud race confirms that Vegas is a leading city in the world’s sporting landscape.