Vegas economic impact hits $1.5 billion
Understanding the Bahraini Sports Playbook
Did last weeks race actually happen? Someone other than Max Verstappen won a Formula 1 Grand Prix, and it was none other than the streak killers themselves: Ferrari and the driver with no seat next year, Carlos Sainz.
As if things couldn’t get more ironic…
We’ve got a tight race at the top of the Drivers Championship going into the Japanese Grand Prix next week.
Max Verstappen - 51 points
Charles Leclerc - 47 points
Sergio Perez - 46 points
Carlos Sainz - 40 points
Oscar Piastri - 28 points
In the United States, the TV numbers were to be as expected. 3% decrease, and hovering near the 600,000 mark. Can’t expect more from a midnight race where most of the world expects the winner to be determined before the lights go out.
Still, I think those numbers are strong enough. We won’t see the full strength of the F1 audience until May where we go racing in Miami and then start the European season.
Until next time 🏎️
Las Vegas Hits the Jackpot with Grand Prix
The Clark County Debrief came out for the Las Vegas Grand Prix, and the highlights are impressive.
On November 19, 2023, Harry Reid International Airport became the US's second busiest, handling a historic Boeing 747-800 among its 2,197 operations.
The 300,000-square-foot pit and paddock building was stood up in just 18 months, adding to the $88 million invested in public infrastructure.
The payoff?
An astounding $1.5 billion in economic impact and a record-breaking $77 million in tax revenues for state and local governments was sourced to F1.
Over 17,000 staff hours ensured the event's success, setting a precedent for future high-impact events in Clark County. With nearly 2,200 jobs supported by infrastructure development and another 5,100 by event operations, the LVGP was more than a race; it was a game-changer for Vegas, proving that when it comes to hosting, Vegas is always in the fast lane.
And we’ll see an upgraded VIP experience next time we race in Vegas. Liberty Media’s recently acquired Quint Events is upping the ante for 2024.
Three-day F1 Experiences packages via Quint for the Las Vegas Grand Prix went on sale Monday and start at $1,952 for general admission tickets in the T-Mobile Sphere Zone, $4,089 for club tickets in Club Paris and $16,350 for tickets to the Paddock Club.
The most expensive package offered by F1 Experiences is the three-day F1 Garage pass that’s listed at $38,150. It includes access to the paddock, the restricted inner circle of F1 races, access to the Paddock Club rooftop at the F1 pit building, a pit lane walk, F1 legend and ambassador appearances, a guided track tour, access to various areas of the course for photo opportunities, podium access to celebrated the top three finishers.
Read the full report here.
Bahrain's Visionary Playbook in Sports and Innovation
Bahrain's Mumtalakat Holding Company is making moves that not only redefine its portfolio but also position the sovereign wealth fund as a pivotal player in the sports world and beyond. This isn't just about diversification; it's a strategic play that speaks volumes about Bahrain's vision for the future. With the acquisition of McLaren Group as a headline grabber, Mumtalakat's strategy unfolds on a canvas much larger than the confines of traditional investment.
Sovereign Wealth is Big (Sports) Business
In the world of sovereign wealth funds, strategic investments in sports and innovation are more than just revenue streams. They're about crafting a national narrative of progress, innovation, and global presence.
The most globally known Fund is the Saudi Public Investment Fund (PIF).
Saudi Arabia is attempting to rebuild its image and prepare for a world without oil — and sport is a key part of its strategy.
PIF bought English Premier League Club Newcastle United in 2021 after years of legal wrangling. The club has spent over £400million on transfers since the takeover, a figure that would likely be considerably higher were it not for the Premier League’s increasingly stringent profit and sustainability Rules.
During the same month the PIF bought Newcastle United, the Saudis dropped a bombshell on the world of golf by pledging to invest $2billion in a new competition called LIV Golf.
PIF has also invested heavily in the worlds of cricket, boxing, horse racing, tennis, eSports, MMA, and even the WWE.
And in the world of Formula 1, the temporary Saudi Arabian Grand Prix in Jeddah has only begun to raise interest and awareness around the massive Qiddiya project, which will be home to the new Saudi Arabian GP.
Qiddiya will feature five cornerstones: Sports & Wellness, Nature & Environment, Parks & Attractions, Motion & Mobility, and Arts & Culture.
The project will include more than 10 theme parks, including the world's first Dragon Ball Z theme park, which will feature Son Goku, Vegeta, Frieza, Majin Buu, and Gohan. The Six Flags Qiddiya theme park will also be home to Falcon's Flight, the world's longest, tallest, and fastest coaster.
Qiddiya is expected to attract 48 million annual visitors, create 325,000 new jobs, and contribute $36 billion to GDP once fully operational.
Ok, so what does this matter to the Bahraini’s?
The Numbers Tell a Story
The Bahrain Mumtalakat Holding Company — the sovereign wealth fund of Bahrain — has “completed a full takeover” of the McLaren Group, which owns a majority share in the company’s celebrated F1 team. The fund has “taken full ownership of the share capital ‘following the conversion of all preference shares into ordinary shares.’”
Mumtalakat has been partnered with McLaren since a 2007 purchase of a 30% stake from former Chair Ron Dennis and the late Mansour Ojjeh. Following the 2020 sale of $233M in shares of the F1 team to U.S. investment firm MSP Sports Capital, the McLaren Group retained a 67% stake in McLaren Racing.
This move isn't just a financial pivot; it's a strategic statement.
Mumtalakat’s playbook is having a keen eye of investments that transcend traditional sectors, with over 50 enterprises under its belt valued at around $9.8 billion as of mid-2023, has its sights set on global markets where the brand value and innovation intersect with economic ambition.
Mumtalakat is a shareholder in:
Aluminium Bahrain
Bahrain Real Estate Investment Company
Bahrain Telecommunications Company (36,7%)
Envirogen Group (British group specialized in industrial water treatment solutions)
FAI Aviation Group (German private jet rental company)
Gulf Cryo (first Kuwaiti gas manufacturer in industrial gases such as oxygen and nitrogen to the petroleum industry)
Gulf Hotel Group (Bahraini hotels chain)
National Bank of Bahrain
Premo Group (German group specialized in the development, manufacture and sale of electronic components)
Mumtalakat's foray into the sports industry with McLaren at the forefront signals a broader trend of sovereign funds tapping into the universal appeal and dynamism of sports to achieve strategic national objectives.
S&P Global Ratings recently pegged Mumtalakat's outlook to stable from positive, a reflection of a broader recalibration in response to economic headwinds. Yet, the strategic significance of Mumtalakat's moves cannot be overstated.
A Vision Beyond Numbers
In the backdrop of global uncertainty, Mumtalakat has shown resilience and strategic foresight. Its investments, particularly in McLaren, underscore a commitment to sectors that offer not just financial returns but also align with Bahrain's broader economic diversification goals.
The fund's financial maneuvers, including strategic support to its subsidiaries and a balanced approach to dividends, reflect a nuanced strategy that balances immediate financial health with long-term strategic vision.
The narrative unfolding with Mumtalakat at the helm goes beyond spreadsheets and financial projections. By taking full control of McLaren, Mumtalakat is not just betting on a brand; it's investing in a legacy of excellence and innovation. This is a testament to Bahrain's vision of not just surviving but thriving in the global economy through strategic diversification and innovation.
As Mumtalakat continues to navigate through the complexities of global investment, its strategy reveals a sophisticated understanding of the interplay between financial returns, strategic value, and national ambition. The acquisition of McLaren is a bold statement in a series of calculated moves that showcase Mumtalakat's role not just as a guardian of Bahrain's economic future but as a visionary architect of a diversified, innovative national economy.
Side Notes
RACER’s Chris Medland noted McLaren Racing CEO Zak Brown has been “rewarded for recent progress within the team with a contract extension” that will keep him in his role until at least 2030. Brown joined McLaren in late 2016, going on to become CEO of McLaren Racing in 2018. He is regularly the team’s spokesperson but has also overseen multiple changes in the wider racing operation, entering and winning races in the likes of IndyCar and Formula E.
The decision to extend Brown’s contract comes with the support of McLaren Group Exec Chair Paul Walsh, who says that Brown has “been central to the team picking up regular podiums in the latter part of last season”
Two weeks back, in the U.K. House of Lords, McLaren’s Bahraini ties were “raised as part of a debate concerning sports being used to improve the image of countries with poor human rights records”.