“While it remains to be seen how this acquisition will influence the promotion of the FIA Formula One 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 Todt.
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The takeover is set to be completed next year, subject to approval by regulators, Liberty Media’s shareholders and F1’s governing body, the Federation International de l’Automobile (FIA).
It could also accelerate the exit of 85-year-old Bernie Ecclestone, the Briton who has run the sport for almost 40 years and built up a business with annual turnover of around $1.9bn.
The deal, which has an enterprise value of $8 billion according to a company statement, heralds a new era for Formula One, a European-dominated sport that has long sought to break into the US market and win fresh audiences.
Speaking after the announcement of the conglomerate’s purchase of F1’s parent company Delta Topco, newly appointed league chairman Chase Carey said the group have plans to take the sport “to the next level”.
Liberty Media will also consider adding new Grand Prix races and step up promotional activity, executives said. “We want to make it (F1) everything it can be”.
The deal has been positive in the F1 community but how will the fans react to this news. “Clearly Formula 1 has been an enormous success much to the credit of Bernie Ecclestone, who has led this business for decades”. Formula One, which is dominated by European teams and drivers, has struggled to challenge Nascar and the Indianapolis 500 in the USA, but its US television audience has grown from a small base. The deal will provide a windfall for CVC, which bought control of Formula One from lenders in 2006 for $2 billion and later sold stakes to BlackRock Inc. and Waddell & Reed Financial Inc. “Simply, Formula One and the teams should basically grow the business going forward”, said Carey, signalling another change in tack from Ecclestone.
But in the six years through 2014, global Formula One viewership slipped to 425 million from 600 million.
Meanwhile, Jean Todt acknowledged Liberty’s expertise ins sports and media, and said he looked forward to working with the company.
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Current owners, private equity firm CVC Capital Partners, will retain a large stake (24.7 per cent) and also have a representative on the Liberty Media board of directors. Concurrently, Liberty acquired 18.7% of Formula One for $746 million in cash. Liberty Media has interests in the Atlanta Braves baseball team, satellite radio service Sirius XM, entertainment group Live Nation and minority interests in Time Warner and Viacom.
