Liberty Media has agreed to acquire F1 for $4.4B "in a cash-and-stock deal," according to Simon Clark of the WALL STREET JOURNAL. Longtime Fox exec Chase Carey will serve as F1 Chair, "succeeding Peter Brabeck-Letmathe, who will remain" on F1's BOD. F1 CEO Bernie Ecclestone also will remain in his position, and the organization will "remain based in London." Carey said, "There's an opportunity to continue to build this business and take it to the next level." Clark notes Liberty's acquisition of F1 is "happening in two stages." In the first stage, it has "acquired an 18.7% stake." Liberty is "aiming to acquire the rest" in the Q1 next year, "contingent on approval from antitrust regulators," F1's regulatory body and other entities (WALL STREET JOURNAL, 9/8). MOTORSPORT.com's Charles Bradley noted Carey believes F1 "offers Liberty Media an 'incredibly low-risk' business model" due to its $9.3B of contracted revenue "under long-term contracts that extend" as far as '26 (MOTORSPORT.com, 9/7).
DAWN OF A NEW ERA: The GUARDIAN's Giles Richards noted the income from the sale is "likely to make F1 the most profitable deal" in Liberty's history. Much is "expected of the new owners, with considerable emphasis on pushing the sport into new media and targeting new audiences." Liberty will "use its leverage as a media company to promote the sport and is likely to develop a new business model to back it" (GUARDIAN, 9/7). The FINANCIAL TIMES' Bond, Ahmed & Garrahan write for F1, the deal "brings to an end a decade of ownership by CVC Capital, the private equity group which bought a majority stake in the sport" for about $1.7B in '06. CVC said that it "would retain board representation at F1." A CVC rep also will "be joining" the Liberty Media BOD (FT.com, 9/8).
TEAM SPORT: In London, Kevin Eason notes F1 teams will be "given the chance to buy a stake in their sport for the first time under the terms of the takeover." 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." Teams who "claim that the business" of F1 was "conducted without them will now have the opportunity to invest and reap the rewards of a business that has grown hugely" (LONDON TIMES, 9/8).
CHANGING OF THE GUARD? Ecclestone said Liberty "wants me to be here for three years." The GUARDIAN's Richards notes this will "be a disappointment to some," as many "cannot wait" for Ecclestone to go. However, what Ecclestone has "done for F1 since the late 70s should not be underestimated." What was once of "niche interest with very limited exposure is now a genuinely global business." Even given the "criticised drop in viewing figures, F1 pulls in a worldwide audience" with numbers "almost any other sport would kill for" (GUARDIAN, 9/8). In London, Daniel Johnson writes "despite his determination to fight on, Ecclestone faces an unprecedented battle for power" with Carey. He is "likely to find Carey one of his toughest adversaries." But Ecclestone "claimed his relationship with Carey would be different from previous executives brought in to work with him." Ecclestone said, "He (Carey) can do lots of things that I haven't done with this social media, which he seems to be in touch with. He's been dealing with sponsorship with his TV people. Between us we'll get on with it" (London TELEGRAPH, 9/8). DEADLINE.com's David Lieberman noted Ecclestone has a 5.3% stake in F1, and "his family owns an additional 8.5%" (DEADLINE.com, 9/7).
MARKET WATCH: MOTORSPORT.com's Bradley writes Liberty has "pledged to keep Europe as a key foundation to its strategy, while exploring the potential for 'a whole new generation of fans' in new markets." Carey said that Liberty is "excited to grow the sport in emerging markets -- as well as his native America -- in [the] future." Carey: "Building the sport in Europe, building on that foundation, has got to be second to none. ... In the longer term, markets like the U.S. and key Asian markets are opportunities to develop. We're not going to do that overnight" (MOTORSPORT.com, 9/8). Ecclestone said that he is "optimistic Liberty has the resources, expertise and outlook to drive the growth of F1" -- particularly in the U.S. (AP, 9/7). In N.Y., Michael Grynbaum writes F1 is "among the world's most popular sporting organizations," but it has "struggled to break into the American market" (N.Y. TIMES, 9/8).
UP TO SPEED: The TELEGRAPH's Johnson writes it is "hard to get your head around the idea that a sport can be valued so highly," but F1's "complicated ownership structure makes it even harder to understand." Most of its revenues "come from three sources: hosting fees from race promoters, television deals and sponsorship." The "shift towards pay TV is already damaging" F1, and that can "only go on so long." The "rise of new media cannot be stopped -- Ecclestone is notoriously sceptical about social media -- and before long he is going to run out of countries around the world with millions to spend on hosting a race." Johnson: "This must be the rationale behind why an American mogul like John Malone was interested in the first place." For Liberty, F1 will "be a content platform, but it is also a means of making money." Many hope Liberty will "open the sport up, taking it to an American audience with far more gusto than ever before" (London TELEGRAPH, 9/8).
