Formula One Sale to Liberty Media Corp Confirmed in Deal Valued at $8bn
The sale of Formula One to the Liberty Media Corp has been agreed, though the previous ownership will retain shares.
Image via Red Bull Content Pool
The sale of Formula One to the Liberty Media Corp has been agreed, ending years of speculation over the future of the world's third most-watched sporting event.
According to The Guardian, the takeover values the sport at $8bn. The initial deal sees an 18.7 per cent stake in the business sold for $821m, with the full purchase scheduled to be completed in March 2017, when F1 will begin its 68th season.
Owned by 75-year-old billionaire John Malone, Liberty Media has stakes in several other sports businesses, most notably the Atlanta Braves Major League Baseball side.
The sale follows a decade of ownership by CVC Capital Partners, who will retain shares but cede control of the sport to Liberty.
Bernie Ecclestone – who also retains shares – will remain as chief executive officer of F1, reportedly for the next three years, which will make the Englishman 89 before he potentially steps down.
He will work under Chase Carey, vice-chairman of 21st Century Fox, who assumes the role of chairman. However, it is likely to be Ecclestone – who still commands incredible power within the F1 paddock – who ultimately calls the shots. Moreover, it is difficult to imagine him willingly heading into retirement in three years' time.
As a global sport with tremendous history, several star players and multiple high-end brands, F1 could be seen as a shrewd investment by Liberty.
But the sport will require considerable work if it is to continue to be a success for the long haul. During recent years F1 has struggled to attract new fans and appears caught between its traditional position as the world's fastest sport and a move towards green technology. It was slow to see the value of an online presence, while Ecclestone himself has dismissed the importance of a younger audience because they "will see the Rolex brand," but "can't afford it." The sport has also disappeared behind a paywall in several crucial markets, dramatically cutting the number of TV viewers.
Perhaps most worryingly, the on-track product has left a great deal to be desired in recent seasons, with last weekend's race at the historic Monza circuit providing a lack of drama. The Mercedes team have presided over arguably the most dominant three-year period in the sport's history, winning 45 of the past 52 races and stifling any real sense of competition.
But the deal can be seen as positive given what has gone before. The previous owners have come in for particular criticism, with many inside the sport believing that CVC sought only to extract funds from F1 without investing in its future. They have seen a huge return on their initial investment since purchasing the sport in 2006, but questions have been raised about what has gone back into F1. Speaking to Autosport, Force India deputy team principal Bob Fernley described CVC as "a corporation... that's only been interested in extracting money".
The sale to an American company is particularly important, with Ecclestone having spent 20 years trying to improve F1's visibility in the U.S. The current U.S. Grand Prix is held in Austin, while a new American-based team debuted in the sport this season.
F1 remains small in comparison with the NASCAR series, and is likely to need a successful American driver if it is to truly capture the country's imagination. The last American to win a Formula One race was Mario Andretti in 1978.