Liberty Media, the US media giant and commercial rights holder of motor racing’s Formula 1 (F1), has announced that it is buying a plot of land in Las Vegas for $240 million to build a pit and paddock complex for next year’s Las Vegas Grand Prix.

In March, F1 confirmed it would return to Las Vegas in 2023 with a new Saturday night race after securing its third US grand prix venue alongside Miami, Florida, and Austin, Texas.

The track layout showed the circuit will utilize existing roads for the majority, including a major section of the iconic Strip, with undeveloped land to the east of Koval Lane being used for the pit and paddock, as well as the start and finish straight.

On Friday (6 May) Liberty confirmed had acquired the 39-acre (158,000-sq m) plot of land that will be used as a center for operations next November.

During a first-quarter earnings call with analysts, Greg Maffei, Liberty Media’s chief executive, said: “The build-out for this track will require increased capex [capital expenditure] and opex [operational expense] to develop.

“It’s too early to provide you with numbers, but we intend to update you later this year.

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“I would note that Liberty Media did enter an agreement to acquire 39 acres east of the Strip to lock in circuit design and create capacity for the pit and paddock, among other hospitality and race support venues

“I expect that transaction will close in the second quarter and the purchase price was $240 million. It will be funded by cash on hand at the Formula One Group level.”

The company also announced an all-new business model that will be used for the Las Vegas Grand Prix, with Liberty self-promoting the race via its entertainment business Live Nation and local stakeholders, rather than charging promoters to host the event.

Explaining the decision to personally invest in the event, Maffei said: “Our decision to promote Vegas in conjunction with Live Nation and local partners is driven by a couple of things.

“One, proximity – it’s fairly easy, relatively, being in Denver to get to Vegas for us to do the work and we have knowledge of local US markets relative to many other markets.

“But more importantly we see the opportunity of being a promoter as a way to expand our understanding of the business, understand how to be the best F1 product on the track for other promoters as well, to take the opportunity to grow our knowledge and understanding and potentially promote other races down the road.

“Vegas is going to be large and a perhaps unique opportunity, so from a financial perspective we think this one sets up pretty well to be worth the time and extra focus to become the promoter.”

Liberty has been open about growing the sport in the US since taking over commercial rights at the start of the 2017 season and will look to now build on commercial deals in the run-up to the race.

No date has been set for the Las Vegas event.

Meanwhile, Liberty has announced F1 posted revenues of $360 million for the first quarter of 2022, a 100% increase from the same period last year.

The series posted revenues of $180 million for the first quarter of 2021, showing signs of recovery after the pandemic, which increased to $787 million in the final quarter of 2021 after staging seven races during that period.

F1 posted a total operating profit of $19 million for the first quarter of 2022, up from the $47 million loss it recorded for the same period last year.

The series staged two races in the first quarter of 2022, the season-opening grand prix in Bahrain and the Saudi Arabian GP, compared to the one race it held in the first quarter of 2021.

F1 said its primary revenue increased in the first quarter of 2022 due to growth across race promotion, media rights, and sponsorship.

Media rights revenues increased off the back of growth in subscription from F1 TV, the series’ over-the-top streaming service, as well as extended rights deals, stuck with Australian pay-television broadcaster Foxtel and French pay-television broadcaster Canal Plus.

Sponsorship revenue, meanwhile, was bolstered by new deals with Salesforce, the customer relationships management company, international cruise line MSC Cruises, and technology firm Lenovo.

The series’ revenue increase was also helped by additional hospitality revenue from the Paddock Club experience at the Bahrain and Saudi Arabia races which was not available in the first quarter of 2021.

The first quarter of 2022 also saw the series confirm the Las Vegas Grand Prix for 2023 and extend its hosting agreement with Italy’s Enzo e Dino Ferrari International Circuit.

Stefano Domenicali, F1 president and chief executive, said: “We’ve had a phenomenal start to the 2022 Formula 1 season, building on our momentum from a successful 2021.

“The new cars and regulations are delivering as we had hoped, enabling closer racing, more overtaking, battles through the field, and thrilling results.

“Our events are attracting growing audiences both in person and across all our platforms.

“We were pleased to announce multiple new sponsors around the start of the season, especially in the technology space.”

The 2022 season currently comprises a confirmed 22 races following the cancellation of the Russian Grand Prix, but Liberty has said it is seeking a destination to replace the race.