Liberty Media Acquiring Formula One Auto Racing8 Sep, 2016 By: Erik Gruenwedel
Seeking singular control of a major televised sport, Liberty Media Corp. Sept. 8 announced it is purchasing Formula One, the venerable European auto racing series owned by CVC Capital Partners and run with an iron fist by 85-year-old CEO Bernie Ecclestone.
The transaction includes an initial 18.7% minority stake for $746 million, funded entirely in cash (which is equal to $821 million in consideration less a $75 million discount to be repaid by Liberty Media to selling stockholders upon completion of the acquisition). The remaining stake sale is subject to conditions and makes the total purchase worth $8 billion, including $4.6 billion in debt.
Upon completion of the deal, Liberty Media Group will be renamed Formula One Group. Formula 1 will continue to run by Ecclestone, with former 21st Century Fox senior executive Chase Carey named chairman.
Liberty Media, which is owned by John Malone, has ownership stakes in Lionsgate, the Atlanta Braves, Sirius XM and Liberty Media Group.
"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 shareholders. 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,” George Maffei, CEO of Liberty Media, said in a statement.
Notably, Formula 1 racing in the U.S. has had mixed results. With domestic auto racing predicated on NASCAR and Indy, currently just one F1 event occurs stateside, the U.S. Grand Prix in Austin, Texas.
The sport enjoyed a storied past domestically, with Mario Andretti the country’s most successful driver. Andretti’s F1 career ended 42 years ago in 1974. Andretti’s son, Michael, raced briefly in 1993 for the McLaren team. The most-recent F1 American driver, Scott Speed (no joke), lost his ride in 2007.