Formula One: F1 teams to have stake in sport

With new F1 owners Liberty Media open to F1 teams buying a stake in the sport, teams now have a chance to reap the rewards of the huge business of the motor racing franchise.
With new F1 owners Liberty Media open to F1 teams buying a stake in the sport, teams now have a chance to reap the rewards of the huge business of the motor racing franchise.PHOTO: EUROPEAN PRESSPHOTO AGENCY

New owners Liberty Media open to give them chance to invest in sport as keen participants

LONDON • Formula One teams will be given the chance to buy a stake in their sport for the first time under the terms of the takeover by Liberty Media on Wednesday.

Details reveal that several teams have already approached Liberty wanting to take shareholdings after the global media conglomerate completed the first steps to a full US$8 billion (S$10.8 billion) takeover of Formula One.

It is not known which teams are interested, but McLaren, Mercedes, Red Bull and Ferrari are likely to be the first names in the frame as they bid to secure the future of the sport.

A Liberty Media statement read: "The teams will be given the opportunity to participate in the investment in Formula 1, and the detailed terms of that investment will be agreed in due course. Certain teams have already expressed an interest in investing after completion of the acquisition."

Chase Carey, former vice-president of 21st Century Fox and a board member of News Corporation, will move in as chairman to run the new business.

But Bernie Ecclestone, long tipped to be pushed out of the sport he can claim to have created, will stay on as chief executive.

It appears to be the best of all possible worlds for Formula One.

Teams who claim that the business of the sport was conducted without them will now have the opportunity to invest and reap the rewards of a business that has grown hugely.

Earnings in 1999 of US$341 million have soared to US$1.8 billion last year.

Teams that have complained bitterly that CVC Capital Partners, the London-based private equity group that owns Formula One, have swept up massive profits without investing can now rest easy that Liberty, which has television interests all over the world, look set to become an active owner, promoting the sport with an eye on huge growth.

While Ecclestone will stay on in his traditional role negotiating with circuits and television companies - and as the figurehead that has made the billionaire one of the most recognisable faces in world sport - Carey will attempt to move Formula One into new territory.

Carey outlined his vision for the sport like this: "The opportunity is to grow and develop this sport for the benefit of the fans, teams, partners and our shareholders by increasing promotion and marketing of F1 as a sport and brand.

"Enhancing the distribution of content, especially in digital - currently a very small percentage of revenue.

"Evolving the race calendar. Establishing a broader range of commercial partnerships, including sponsorships.

"Leveraging Liberty's expertise in live events and digital monetisation to make our events bigger than ever."

The first US$746 million changed hands late on Wednesday as the final legal details were tied up following negotiations that have lasted more than two years.

CVC will remain as a shareholder, no doubt delighted with an investment that has yielded profits of more than US$4 billion after paying US$1 billion for the sport in 2006.

Now Formula One looks to a new future after years of petty wrangling and unease over CVC's stewardship.

Bob Fernley, deputy team principal of Force India, once accused CVC of "raping" the sport; perhaps now he can look forward to an era in which the owners are keen participants.

After days of wondering whether his hands would be prised from the steering wheel of the sport that has been his life, Ecclestone appears to have decided to work with the new owners rather than walk away.

The man called the ringmaster will be 86 next month has been promised a three-year contract.

However, Liberty is probably wise to keep a chief executive whose contacts book boasts everyone from presidents to kings.

Ecclestone also remains the key route to the teams with his vast knowledge of how they work and the network of deals that remain.

THE TIMES, LONDON, THE GUARDIAN

A version of this article appeared in the print edition of The Straits Times on September 09, 2016, with the headline 'F1 teams to have stake in sport'. Print Edition | Subscribe