VIRGIN MEDIA’S US OWNER LIBERTY TO BUY FORUMLA1 IN $6BN DEAL
US firm Liberty Media has confirmed it is buying the racing business Formula 1 for $4.4bn (£3.3bn). The move ends years of speculation about the ownership of the company.
Bernie Ecclestone will remain as chief executive but Chase Carey, vice-chairman of 21st Century Fox, will become the new chairman.
Liberty Media has stakes in several sports and entertainment businesses, including the Atlanta Braves Major League Baseball club.
Owned by the billionaire John Malone, Liberty will initially purchase a minority stake in the world’s leading motor-racing championship. A full takeover is planned if regulators approve the deal.
The total transaction values the firm at $8bn but includes $4.1bn worth of Formula 1’s debt. This is one of the biggest deals in sports history and one of the most important moments in the history of F1.
Under overlord Bernie Ecclestone’s long command – and the last decade of ownership by private equity group CVC – the motorsport series has enjoyed remarkable growth in terms of global popularity, profits and new races.
Liberty Media will hope to build on these strengths, helping the sport gain new fans, especially in the Americas, and to capitalise on new opportunities around marketing, promotion, digital rights and social media.
However, assuming European regulators approve the takeover, there are issues that the new US owners will need to address – the decline in appeal among younger audiences in an ultra-competitive sporting landscape, the rising costs to teams, fans and circuits, and the predictability of races.
Many inside the sport will be relieved to see the back of CVC, which has done very well out of its initial investment, and excited by the future. But this is also the beginning of the end of Mr Ecclestone’s remarkable reign, and inevitably there will be uncertainty too.
“We are excited to become part of Formula One,” said Greg Maffei, chief executive of Liberty Media.
“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.”
Mr Ecclestone said: “I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them.”
Earlier, he said in an interview with Reuters that he had been asked to stay on for three years and would miss the Singapore Grand Prix on 18 September as he needed be in London for the negotiations.
The 85 year old has run the sport for 40 years. Liberty Media is buying the stake from the private equity firm CVC Capital.
CVC has held a stake for the past decade but sold some of its holding in 2012. It has been criticised for taking considerable profits from the sport, which has suffered from falling TV ratings in recent years.