Liberty Media CEO Greg Maffei said that Formula 1's teams are "on track to contribute a chunk" of the $4.4B which Liberty Media is using to buy the auto racing series, according to Christian Sylt for FORBES. When it was announced in September that Liberty plans to buy control of F1 from private equity firm CVC, "it came to light that the teams had been offered the opportunity to buy shares in the business." Three shares have been designated as team shares and new F1 Chair Chase Carey said that “some of the teams have expressed an interest in investing.” Speaking at a Liberty investor meeting, Maffei said, "We obviously also want to meet with the teams and I think as has been mentioned we have expectations that they will become owners in Formula 1 primarily through the placement of some of the shares to the CVC Group to them." Maffei is "referring to shares in Liberty which are being offered to CVC as payment instead of cash." Cash comprises just 25% of the $4.4B purchase price for F1, "with shares in Liberty making up the remainder" along with a payout of $351M in loans which will convert into non-voting Liberty shares in 30 months. Even though the terms of the takeover have been signed, CVC is "still looking for more cash." Liberty has agreed to "try to sell to external investors some of the shares it has offered CVC which would receive the cash from them instead." As Maffei revealed, some of these investors are "none other than the teams and it is incredibly ironic for a number of reasons." Some in the sport see Liberty as "somewhat of a savior which will boost F1’s profile but looking at its financials raises questions as to whether this is possible." Liberty's F1 investment presentation states that following the takeover Liberty would have $104M of cash compared to the $627M that "F1 itself has in the bank." That is "just the start." Not only is Liberty "selling its shares to the teams in order to pay CVC," its reserves "will not even cover" the $1.1B cash payment. Instead, it is being "partly funded with loans secured on Liberty’s other assets such as its shares in companies like event promoter Live Nation, Time Warner and Viacom" (FORBES, 11/11).
