Liberty Media, the diverse company chaired by investor John Malone, revved its engines Wednesday, agreeing to buy the Formula One in a cash and stock deal that puts the value of the auto racing organization at $4.4 billion.
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The agreement ends years of talks and speculation about who will take control of a world-wide sporting franchise, which had $1.83 billion of revenue in the 12 months to July 31. Mr. Malone already controls the Atlanta Braves baseball team.
The total transaction values the firm at $8bn but includes $4.1bn worth of Formula 1’s debt.
Formula One entered a new era on Wednesday as United States billionaire John Malone’s Liberty Media agreed a takeover that values the motorsport at US$8 billion and raises questions over the role of its colourful, long-time mastermind, Bernie Ecclestone.
Carey added: “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”.
Liberty said it has initially purchased a minority stake of 18.7 percent for $746 million.
Despite the big profits, some F1 teams are plagued by financial problems and the sport faces challenges to its fanbase and TV viewership, with its races often criticised as predictable.
Formula One drivers start the Russian F1 Grand Prix in Sochi, Russia, October 11, 2015.
CVC has owned the sport since 2006, making a huge return on its initial investment of $2bn.
The consortium of sellers led by CVC will own about 65pc of the Formula One Group’s equity and will have board representation at Formula One. Much is expected of the new owners, with considerable emphasis on pushing the sport into new media and targeting new audiences. In a statement he said: “I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them”.
The sale of British broadcasting rights for the sport to Sky in 2011 was done and dusted before a bemused paddock had any idea of the deal. Many decisions like taking races to new places while scrapping historic venues have met with criticism.
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How long they will stick with F1’s old guard in the new era remains to be seen.
