Washington: Formula One entered a new era on Wednesday as US billionaire John Malone’s Liberty Media agreed a takeover that values the motorsport at $8 billion and raises questions over the role of its colourful, long-time mastermind, Bernie Ecclestone. In a deal that ends years of speculation over F1’s future, Liberty said it had struck an agreement to buy out Formula One’s parent company from CVC Capital, and had already acquired a minority stake of 18.7 per cent.
Liberty Media group will pay a total equity price of $4.4 billion in cash, newly issued shares, and exchangeable debt to complete the deal, which gives Formula One an enterprise value of $8.0 billion. Liberty said it would keep Ecclestone, who built Formula One into a global operation over nearly four decades, as chief executive, but also named 21st Century Fox vice chairman Chase Carey as the company’s new chairman.
“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,” Carey, 62, said. “I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike.” 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.
It gives Liberty control of a global and highly profitable sport which includes 21 races this year stretching from Melbourne and Shanghai to Sochi, Mexico City and finishing in Abu Dhabi.
Formula One rakes in billions from advertisers and broadcasting rights for what is one of the world’s most-viewed competitions. It also earns millions from Formula One-branded merchandise. F1’s future under CVC has long been in question and a mooted share flotation in Singapore was shelved in 2012. 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.
