Before the Las Vegas Grand Prix (LVGP) F1 race, MGM Resorts officials mentioned they had high expectations on how much revenue the company would see. It appears as though the expectations were met and possibly exceeded.
During the Leveraged Finance Conference, MGM Resorts Chief Financial Officer Jonathan Halkyard said:
“It (LVGP) was the highest-grossing weekend for us in hotel revenue in the company’s history.”
The company will publicly release official revenue information during its fourth-quarter earnings call in early 2024.
Halkyard added further context by saying the highest-grossing period for MGM Resorts before the race was CES (formerly known as the Consumer Electronics Show) in 2019.
He also added background information as to why this was such a big deal for MGM Resorts. The weekend of the F1 race, Nov. 16-18, was previously one of the slowest of the year. Now it seems like this was one of the busiest for this casino operator.
Less construction disruption in the future for F1 Las Vegas GP
Since the company had such high expectations for the race it spent a lot of money in preparation to create a special experience. MGM Resorts is dismantling the Bellagio Fountain Club and grandstands in front of the casino.
Halkyard noted the construction disruption this year for the visitors and locals saying that “(t)his was an event that certainly had a lot of friction in the months leading up to it, a lot of construction in Las Vegas. Some of that will certainly be recurring but a lot of it will not be as dramatic in coming years.”
He reiterated that this won’t be the same every year. Halkyard said
“F1 invested hundreds of millions of dollars in capital in their paddock facility. That, along with money that we invested to build this hospitality experience, we’ll reuse that year after year.”
While some of the work building the LVGP circuit will happen every year he reminded those at the conference that most won’t be recurring issues. For example, the same amount of time won’t go in to fixing or paving the roads annually.
Halkyard says he’s “optimistic this is going to be a fantastic event in the years to come.”
Wynn Resorts and Caesars Entertainment also had high expectations for how the F1 race would impact their bottom lines. Similar to MGM Resorts, both companies will report earnings for the quarter in early 2024.
Las Vegas GP was a big TV event for ESPN
While the F1 race was an in-person competition, it was also a made-for-tv event. The racing league’s US broadcast partner said the LVGP “attracted one of ESPN’s largest F1 audiences of the season on Sunday morning, Nov. 19.”
Expectations for the event on US TV were muted since it took place from 1 a.m. – 3 a.m. on the east coast. However, ESPN averaged 1.3 million viewers during the race. This made the LVGP “the third-largest F1 audience of the season on cable and sixth-largest overall on ESPN platforms this season.”
In an ESPN press release about the ratings, the company notes that Las Vegas was the number one viewing market despite local hostility about preparations of the race circuit.
Los Angeles had a 1.5 rating for the race. This was the second-highest behind the 7.4 rating in Las Vegas. The only East Coast market in the top 10 of viewership was Greenville/Spartanburg in South Carolina.
The Formula 1 season is done for the year. The first race next season will take place in Bahrain on March 2.
Next year’s LVGP events will take place from Nov. 21-23. Anyone interested in seeing all of the race events in person next year can make a non-refundable deposit for F1 2024 GP tickets.
The deposit will go towards the full price of multi-day packages. The deposit does not apply to single-day tickets.
MGM Resorts has unique positioning for Las Vegas sports
During the Leveraged Finance Conference Halkyard discussed how MGM Resorts is “uniquely situated” to continue to generate revenue from Las Vegas sports events.
The company has Las Vegas casinos with 30,000 hotel rooms within one mile of:
- Allegiant Stadium
- F1’s permanent paddock
- Future A’s stadium
- T-Mobile Arena
He called out visiting fans coming to Las Vegas to see their team play the Raiders, “you’ll see 50% or better of the fans will be from the visiting team and make not only the game but the entire weekend a part of their experience. These events, for us, turn into what our CEO has called turning a three-hour game into a three-day weekend and that happens routinely.”
Last season, Allegiant Stadium had about 65% of fans from visiting teams for Raiders games. Many of those visitors stay at MGM Resorts properties since Mandalay Bay, Luxor, and Excalibur are the closest properties to Allegiant Stadium.
Halkyard left Las Vegas in 2014 and returned a few years ago. He noted that Las Vegas sports is “the biggest change I’ve seen in the market.”
Earlier this month the A’s received approval from MLB to relocate to Las Vegas. At this time it appears as if the team will build an MLB stadium on the site of the Tropicana casino.
MGM Resorts operates the three other casinos at the corner of Tropicana Ave. and Las Vegas Blvd. with Excalibur, MGM Grand, and New York-New York.
If the A’s build a stadium on the Tropicana site following their plan, expect to see MGM spend money improving nearby properties.