Liberty Media Purchase 18.7 percent of Formula One

[Paul Jeffrey]

Liberty Media have purchased 18.7 percent of the Formula One Group for a staggering $746 million, with 21st Century Fox Vice Chairman Chase Carey named as Chairman, and Bernie Ecclestone staying on as CEO for reportedly a further three years.

Chase Carey has been appointed by Delta Topco and will serve as the new Chairman of Formula One, succeeding Peter Brabeck-Letmathe, who will remain on Formula One’s board as a non-executive director. Bernie Ecclestone will remain Formula One’s CEO, with Ecclestone himself claiming he has been asked to remain on board for a further three years, taking the veteran ringmaster to the grand old age of 88 when his new deal expires.

“We are excited to become part of Formula One. We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholder,” said Greg Maffei, President and Chief Executive Officer of Liberty Media.

“We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport.”​

Further dealings and additional clauses and clearance approvals by the respective antitrust and competition law authorities have yet to be completed, including approval by the FIA and Liberty Media's assorted stakeholders, however the full deal is expected to be completed by the close of Q1 2017.

“While it remains to be seen how this acquisition will influence the promotion of the FIA Formula 1 championship, we welcome this long-term investment in Formula One by a company that has such a broad portfolio of sports, media and entertainment businesses,” said FIA President Jean Todt.​

“As motor sport’s governing body and regulator we acknowledge Liberty Media’s wide expertise in these fields and we look forward to working in close partnership with them in the future in order to further develop Formula 1 and bring it to new generations of motor sport enthusiasts around the world.”​

Upon full and final completion of the deal, Liberty Media will become the majority shareholder with a 35.5% stake in Formula One, while CVC Capital Partners (the current controlling shareholder) will retain a 24.7% share in the sport. In total, the estimated fee is expected to be around the £6bn mark, including the currently rumoured £3.1bn of debt secured by CVC in lieu of expected income generation from Formula One in future years.

With many fans and commentators firmly believing CVC bring nothing positive to the sport, the new ownership could spark the start of a positive upswing in the fortunes of the FIA Formula One World Championship. Positive noises from the Media group have already been made following the announcement, with an official press release from the group promising "Teams will be given the opportunity to participate in the investment in Formula One", potentially supporting the long running need to help Grand Prix teams become more financially stable and attractive to new investors in the teams. For too long Formula One has been stripped of its substantial financial assests, with seemingly little reinvested into the sport to help it grow. With a more dyamic organisation now involved with the sport, one that specialises in media no less, it is not difficult to imagine much greater strides being made to engage on a more personal level with the sports key asset, its fans. The way in which fans engage with sport has changed greatly in recent years, social media such as Twitter has become ever more popular and, alongside innovations such as internet broadcasting, has been for too long overlooked by Formula One in the never ending quest to gain more and more money from TV revenue deals, leaving many contries locked behind paywall television deals and the subsequent reduction in worldwide viewing figures.

For his part, Chase Carey is delighted to be picking up the reigns as from Peter Brabeck-Letmathe as the Chairman of Formula One:

"I am thrilled to take up the role of Chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team,” Carey said. “I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world.

“I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike."

It remains to be seen how the takeover will effect the immediate business of Grand Prix racing, however one can only hope that in a sport that desperately needed change, now we have it, it will be a change for the better.

Check out the Formula One sub forum here at RaceDepartment for further news and discussion regarding the premier racing series in the world.

So CVC are finally going... do you think the sale to Liberty Media will help improve the sport? Let us know in the comments section below!

 

[Lorenzo Bonder]

My thoughts below:

 

[burrito]

Careful @Paul Jeffrey they'll come for you for posting that picture (It's part of their new, aggressive digital media plan)

/sarcasm

 

[Esox71]

Hamilton for Boys in the hood 2!

 

[Rodent]

With Bernie still around nothing much will change I think. To paraphrase Pat Symonds, Bernie just knows how to control the game to well. That said 3 more years is not THAT long and F1 will still be around, maybe around that time we can see a paradigm shift in terms of the engines and tracks. A man can dream anyway.

 

[Will Mazeo]

People put way too much blame about the cars on Bernie when they really shouldn't, just saying.
Not sure about Americans owning F1 seeing how they like to NASCARize everything. Should we expect GWC and yellow flags for no reason?

 

[BoogerMac]

People put way too much blame about the cars on Bernie when they really shouldn't, just saying.
Not sure about Americans owning F1 seeing how they like to NASCARize everything. Should we expect GWC and yellow flags for no reason?

To truly "NASCARize" a racing series, one must add at least 10 ovals to schedule and at least one must be in the middle of absolutely nowhere (like an Iowa equivalent in Europe).

 

[Lorenzo Bonder]

To truly "NASCARize" a racing series, one must add at least 10 ovals to schedule and at least one must be in the middle of absolutely nowhere (like an Iowa equivalent in Europe).

They got Lausitzring and Rockingham, that's two.

Add Nardo, that's three and four since Nardo is long as F*.

Monza round #1, that's five.

WE ARE HALFWAY THERE.

 

[EpilepticToast]

Actually if they were run anything like IMSA is behind the scenes, with that "American" approach, F1 would certainly be back to it's best and the pinnacle of motorsport once again

 

[JeffL]

"We" haven't nascarized Indy completely as of yet, so there is some hope

 

[AndrewBo]

There goes the FREE TV access here in Germany via RTL.

 

[Nick Gregory]

like an Iowa equivalent in Europe

Baku is close enough.

 

[Rob]

Sweet! We will be getting six new races in the U.S. Can't wait. About time we upgraded this sport the hell out of Europe.

Um, then again...

"Competition" Cautions for commercial breaks every 10 mins.; Green-White-Checkered (basically, it's...we are going to just wing it at the end); Getting to hear Lewis Hamilton say "I got the Tel-Mex/NAPA/Benz (bling!) to behave after gettin' in the marbles."; Some daym fine even racin' with just the manufacturer logos being different, not the engines; polish victory laps!; no more pesky stewards!; Track boundaries? HAH; and the best of all...International fist-fights!

Now, I'm not so sure.

 

[Terry Rock]

Say what you will but Bernie is one smart cookie.
This guy could convince Eskimos to buy ice, while yet selling them coats.
Most of the money to be made has already left F1.
Viewing and trackside attendance is down. There's competition from other forms of motorsport etc....
While there is still plenty of money to be made, it will never return the massive profit it once did..
Bernie's already has that money socked away.
This 'deal' may turn out to be the ultimate pig in a poke.

 

[Vaoh]

It'll be an interesting time period for F1, that's for sure. Liberty Media, just like CVC are gonna try and get as much as they can out of the sport. But Liberty Media seems more keen on expanding viewership, most likely with the goal of exposing sponsors to that greater global audience. Now, what they're gonna need to do is find ways to expand viewership to attract more sponsors (And thus more money for them.) There are many ways of doing this, from adding online streaming services to revising TV contract deals, etc. But the attraction, the race itself also has to be entertaining. Might it be good on track action, or after race drama created by the teams and drivers. They'll find what the majority likes and market that.

I'm hopeful they focusing on making the racing good, but everyone knows drama sells by the buckets. Everyone loves a good controversy. So I foresee them going that route, maybe making the racing a little closer to make the drama easier to market.

 

[Chris]

CVC were only there to make money for themselves. If it meant raping the sport, then so be it, and that's exactly what they did. Donald Mackenzie said through gritted teeth that CVC actually cared about F1, but it's clear to see that was a blatant lie as the sport got utterly pillaged over the 10 years they were majority owners.

Whilst I do have a little bit of hope that the new owners are a little more passionate about the sport and actually want to see it succeed (their statements so far have been saying all the right things), their comments regarding retaining and maintaining F1's presence at European circuits is fantastic. However I am concerned about their affiliation with Fox and Rupert Murdoch, which can only be a bad thing for tv coverage of the sport.

I guess it's just something that we'll have to wait and see what happens.

 

[LacSlyer]

People put way too much blame about the cars on Bernie when they really shouldn't, just saying.
Not sure about Americans owning F1 seeing how they like to NASCARize everything. Should we expect GWC and yellow flags for no reason?

I couldn't agree more with this about Bernie, as it has more to do with human nature looking for someone to blame rather than accept things being the way they are. The drivers and teams have more control in the sport than ever, and while I do agree a that F1 has some serious issues, Bernie is hardly the sole person responsible for them.

In regards to Americanizing the sport, my hope is that their goal is only to popularize the sport rather than change it to suit the desires of an American audience. The problem is though that it just doesn't work well overall as an American sport in my opinion. The commercialization of sports in the US is highly reliant on how you can market the sport, and when you have literally no US drivers that's a huge detriment - regardless of how great the drivers are. American sports are so reliant on the marketing of players that if a sport doesn't have players that Americans can relate to they simply won't watch unfortunately, which is sad. That on top of races being on at 8 am on Sundays, if you're lucky, is an extremely hard sport to market.

 

[Alex72]

It'll be an interesting time period for F1, that's for sure. Liberty Media, just like CVC are gonna try and get as much as they can out of the sport. But Liberty Media seems more keen on expanding viewership, most likely with the goal of exposing sponsors to that greater global audience. Now, what they're gonna need to do is find ways to expand viewership to attract more sponsors (And thus more money for them.) There are many ways of doing this, from adding online streaming services to revising TV contract deals, etc. But the attraction, the race itself also has to be entertaining. Might it be good on track action, or after race drama created by the teams and drivers. They'll find what the majority likes and market that.

I'm hopeful they focusing on making the racing good, but everyone knows drama sells by the buckets. Everyone loves a good controversy. So I foresee them going that route, maybe making the racing a little closer to make the drama easier to market.

F1 goin' WWF wrestling! Drivers shouting and banging chairs over eachothers heads.

Lulz.

 

[EpilepticToast]

well later races would be much appreciated here, it would be nice to sleep in on a Sunday morning again

 

[Chris]

I hope to god they don't Americanize it. Don't get me wrong, America is definitely a market that needs to be tapped into, but the sport should not be shaped or defined around it.