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SBD Global/November 13, 2017/Finance

Formula One Group Records Net Losses Of $160M In First Nine Months Of '17

Liberty Media revealed that its Formula One Group "burned up" net losses of $160M in the first nine months of '17, fueled by increased costs and "high-octane" interest payments on loans held by the auto racing series that after which it is named, according to Christian Sylt for FORBES. In January, Liberty bought 100% of F1’s parent company, Delta Topco, for $4.6B from a consortium of sellers led by private equity firm CVC. Liberty was paid in cash, shares and a loan which could be exchanged for shares. These shares are listed on the NASDAQ exchange as FWONK. The shares have "surged" 76.2% in value since Liberty announced its F1 takeover in Sept. '16. However, over the past month, they have declined by 3.9% to close at $37.45 on Friday, and Delta Topco’s former owners are not "waiting around for further gains." They were initially given shares which represented 64.7% of total but a statement from Liberty on Thursday revealed that "almost all of them have sold up." The "biggest beneficiary" was CVC, as it has pocketed $846.3M from selling its FWONK shares. It "boosted an already high-octane return." Before the sale to Liberty, CVC made an estimated $4.4B on the $965M it invested to buy F1 in '05. Next in line is Kansas-based asset manager Waddell & Reed which has made $407.1M from selling its shares, "bringing its return so far" to $1.7B. It is "unclear why so many of the former shareholders have sold up but there is no doubt that F1 is facing a number of obstacles." Despite "being in the driving seat for nearly a year," Liberty has not yet signed any major sponsors or new races (FORBES, 11/12).
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