Reuters
London, Sept 8: Formula One faces its biggest shake-up in decades with the announcement Wednesday that US cable TV mogul John Malone’s Liberty Media has agreed to take control of the cash-generating glamour sport.
The deal, which has an enterprise value of $8 billion according to a company statement, heralds a new era for F1, a European-dominated sport that has long sought to break into the US market and win fresh audiences.
It could also accelerate the exit of 85-year-old Bernie Ecclestone, the Briton who has run the sport for nearly 40 years and built up a business with annual turnover of around $1.9 billion.
Liberty Media said in a statement, which ended a long-running saga surrounding the sport’s ownership and potential flotation, that it was acquiring an initial 18.7 per cent stake from controlling shareholder CVC Capital Partners. The company hopes to complete a deal for the remainder by the first quarter of 2017.
The statement also added that Chase Carey, the executive vice-chairman of Rupert Murdoch’s 21st Century Fox and a director of Sky News owner Sky Plc, will take over as chairman of the board of F1’s parent company with Ecclestone remaining as CEO.
“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 said in the statement. “I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike.”
Ecclestone added that he welcomed the company into the sport and looked forward to working with them.
The deal however, will be subject to the approval of the International Automobile Federation (FIA), the governing body for Formula One and other global motorsport series, and European anti-trust regulators.
In spite of making F1 into a multi-billion dollar business, Ecclestone has been accused of being reluctant to delegate. Critics have also blamed him of holding back the sport through a failure to embrace fully new media or the digital marketplace, something Liberty is expected to make a priority.
“Maybe it is good news that an American media company buys F1,” Mercedes motorsport head Toto Wolff said in an email reacting to the news of the buyout. “There are things we can learn from the American way, particularly in the digital areas…they will have a close look and then analyse what they think needs to be changed and what needs to remain.”
Malone’s Liberty Global is the world’s largest international TV and broadband company, operating in more than 30 countries in Europe, Latin America and the Caribbean through a series of different brand names.