Ending years of speculation surrounding the future of the sport, Liberty Media has officially announced it is purchasing Formula 1 from its current owner CVC Capital for $4.4bn. The transaction will also see Liberty Media assume $4.1bn of Formula 1’s debt, with the transaction valued at $8bn in total.
In the shorter term, Liberty is purchasing 18.7 percent of the sport for $1.1bn in cash, finalising the remainder of the purchase when the deal is approved by regulators, the BBC reported. The deal is expected to be completed in the first quarter of 2017. Current Formula 1 CEO Bernie Ecclestone will be staying on for at least the next three years, but Chase Carey will take over as chairman. Carey is currently the Executive Vice Chairman of Rupert Murdoch’s 21st Century Fox.
The transaction will see Liberty Media assume $4.1bn of Formula 1’s debt, with the transaction valued at $8bn in total
“I am thrilled to take up the role of Chairman of Formula 1 and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team”, said Carey in a statement. “I greatly admire Formula 1 as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world. I see great opportunity to help Formula 1 continue to develop and prosper for the benefit of the sport, fans, teams and investors alike.”
Liberty Media is a mass media business owned by billionaire John Malone. It currently owns stakes in a range of different sports and entertainment businesses, including the Atlanta Braves baseball team and satellite radio network Sirius XM.
CVC Capital has been Formula 1’s majority owner since 2006, but made steps towards a selloff in 2012. As part of this deal, it will retain 65 percent of the rebranded Formula 1 Group, but will not control voting rights.
There is hope the new owner will breathe some life into the sport and turn around a recent decline in TV ratings. While growing the Formula 1 brand significantly during its ownership, CVC have been criticised for taking substantial profits from the sport instead of investing in it. There is also hope the new owner will be able to update Formula 1’s online presence and break into the US market to attract new viewers.
This is not the only recent significant deal involving the world’s premier motorsport competition: earlier this year, Formula 1 signed a multi-year advertising partnership with Heineken.