F1 race promotion legal battle between Liberty Media and Farid Shidfar
Behind the allure of Formula 1’s return to Las Vegas, a high-stakes legal battle is unfolding over who has the right to promote the race internationally.
The court drama could dampen the excitement created by the high-profile announcement to make Las Vegas the face of the world motor racing circuit in the United States in 2023 after a 40-year absence.
Formula 1 holds annual races for high-powered open-wheel cars in nearly two dozen countries like Monaco, Saudi Arabia, Spain, Australia, France and Italy. Two races are taking place in the United States this year, one in Miami and the other in Austin, Texas.
But before the Las Vegas race takes place, organizers may have to grapple with the legal dispute that pits a Miami tech entrepreneur with Strip ties against Formula 1 and the mega-media company and entertainment company that owns it. Caught in the middle of the litigation are the tax-funded Las Vegas Convention and Visitors Authority and its politically connected advertising company.
There are explosive allegations from both sides, which have brought in expensive Nevada law firms to protect their interests.
Tech businessman Farid Shidfar, who helped shape the Cosmopolitan resort brand when it opened on the Strip in 2010, sees himself as the underdog in the fight against what he calls “the greed and corporate intimidation” from giant Liberty Media Corporation, which owns F1.
Liberty Media and Formula One allege in court documents that Shidfar and his company made “baseless threats” and “demanded multimillion-dollar payments.”
In Las Vegas, cars must roar past iconic neon-lit resorts on Las Vegas Boulevard between Spring Mountain Road and Harmon Avenue, with some spilling out onto Koval Lane east of the famous Las Vegas Strip.
Officials estimate the Grand Prix could attract 170,000 visitors and inject up to $1 billion into the local economy the week of the night race in November 2023. No official date has yet been set.
Paving the way for the race
Shidfar told the Review-Journal that he and his partner, former Las Vegas Assemblyman Chad Christensen, spent 11 years paving the way for last week’s announcement to bring the race here, but receive no credit from Colorado-based Liberty Media for their efforts.
“We did everything in our power to make this happen,” said Shidfar, 52. “There is no doubt that we are the driving force behind the event. We spent a lot of time and resources to put it in place.
Christensen added: “When (Liberty Media) took over Formula 1, they never intended to talk to us. Their way of talking to us was to slap us with a lawsuit and kick us out. They want to crush us with their wallet.
Shidfar, whose late father served as Honda’s managing director in Iran and later the country’s deputy economic affairs and finance minister, has experience dealing with famous entertainment brands. He worked for years in Los Angeles for global consulting firm Accenture, helping companies like Disney, MGM, Sony Pictures and Hilton Hotels improve their business strategies, according to his online biography.
He said he also founded the digital meeting service rundavoo.com and currently leads the U.S. operations of KEO World, a Miami-based small business finance company.
Shidfar claims in court documents that he struck a deal with former Formula 1 CEO Bernie Ecclestone to promote the Las Vegas race. He has a letter that Eccelstone sent him in April 2013 stating that he would sign a contract making Shidfar the promoter of the event. Ecclestone left F1 following its acquisition by Liberty Media in 2017.
Shidfar and Christensen, 52, said they have over the years brought together the political, business and community leaders needed to turn the idea of the race into reality. Track designers, salespeople, casino executives and CEOs of other F1 venues around the world were also among those approached.
In January 2014, Shidfar and Christensen filed incorporation papers for a limited liability company, P2M Motorsports, to promote racing.
But in court papers, Liberty Media argues that P2M never got a meaningful deal to promote the race and that F1 made no commitments to the company.
“As the litigation progresses, F1 and Liberty Media maintain this position,” Amanda Yen, one of the lawyers representing the companies, said in an interview.
Liberty Media, which also owns the Atlanta Braves, Sirius XM and Live Nation Entertainment, filed suit against P2M Motorsports a year ago in Clark County District Court. P2M Motorsports filed a countersuit. The case is progressing slowly but is expected to heat up now, with depositions and other evidence gathered in the weeks leading up to a trial on February 7, 2023.
Liberty’s attorneys allege in the complaint that P2M Motorsports made “exorbitant demands” for millions of dollars from Formula 1 and interfered with the sport’s dealings with the Las Vegas Convention and Visitors Authority and R&R Partners, the longtime LVCVA marketing company.
“As a direct result of P2M’s intentional interference,” the lawsuit said in March 2021, “Formula 1’s potential contractual relationships with LVCVA, R&R and other third parties have been thwarted, resulting in at least a delay , or even a cancellation, of plans for a Formula 1 race in Las Vegas, and causing Formula 1 substantial damages in an amount to be proven at trial.
After the court filing, however, Formula 1 moved forward with race plans and continued to work with convention authority and R&R. LVCVA President and CEO Steve Hill, attended the press conference last week and praised the partnership.
A spokeswoman for LVCVA said the state agency does not comment on ongoing litigation.
As part of its mission to attract visitors and conventions to the Strip, the LVCVA has focused heavily on helping the city attract professional sports teams, such as the Vegas Golden Knights and Las Vegas Raiders, and major sporting events like the Super Bowl.
R&R Partners has been there to support these efforts. The company, behind its CEO Billy Vassiliadis, has also established a reputation over the years as a kingmaker in Nevada politics, helping elect governors, US senators and a range of other government officials. State and local.
Liberty alleges fraud
In their lawsuit, Liberty’s attorneys allege that P2M fraudulently persuaded the LVCVA and R&R to sign confidential nondisclosure agreements in 2017 that prevented them from discussing strategic plans for the race with other parties, including including Formula 1, without the authorization of P2M.
Last year, the LVCVA and R&R Partners filed court documents seeking to intervene in Liberty’s lawsuit and seek a court order invalidating the nondisclosure agreements.
The agencies allege they learned that P2M Motorsports was not the official promoter of the Las Vegas F1 race and that the company made them sign the deals under false pretences.
“Therefore, P2M should not be allowed to use the CNDA as a roadblock to prevent LVCVA and Formula 1 from hosting world-class racing and bringing millions of dollars in economic benefits to this community,” they said. writes the lawyers of LVCVA.
Shidfar denied trying to prevent Formula 1 from coming to Las Vegas.
And his Las Vegas attorney, Michael Cristalli, called the fraud allegations against Shidfar related to the nondisclosure agreements “a brazen assertion” without any supporting evidence.
“I didn’t do anything more than just protect our intellectual property, which they’re using now,” Shidfar said. “They are forcing us to sue, rather than working with us on a way forward. It’s much cheaper than paying us for the effort we put in.
He said the race had the potential to become “the crown jewel” of the F1 circuit. “It’s a good thing for Las Vegas,” he said. “We went into this with great intention.”
Shidfar maintains that he and Christensen developed an expensive “mobilization” plan over the past decade that outlined everything that needed to be done before the race announcement could be made.
Their effort is described in his company’s legal counterclaim against Liberty Media and Formula 1 prepared by Cristalli.
The counterclaim includes references to letters of support from former Nevada Governor Brian Sandoval. The former governor is quoted in a February 2011 letter as saying his office “enthusiastically” endorsed and supported the work of Shidfar and Christensen.
Cristalli also included a January 17, 2018 letter in the counterclaim from Clark County Commission Chairman Steve Sisolak supporting the effort. Later that year, Sisolak was elected governor.
His letter said in part: “My constituency and I, in partnership with P2M (Farid Shidfar and Chad Christensen), have worked hard over the past few years to plan and license an F1 racing series for Las Vegas. We believe that this potential will be very positive for our community. We also believe that Las Vegas would provide an extraordinary venue for F1. »
Christensen said there was no doubting the important role he and Shidfar played in the push for the Las Vegas race.
“Everyone in the state knows that was our effort,” Christensen said. “We were the ones educating the LVCVA so they could figure out how to pull this off.”
Contact Jeff German at [email protected] or 702-380-4564. To follow @JGermanRJ on Twitter. German is a member of the Review-Journal’s investigative team, which focuses on reporting that holds executives and agencies accountable and exposes wrongdoing.