Year In Review: F1's Future Dominates European Headlines After Sale To Liberty Media
The sale of Formula 1 to U.S. media company Liberty Media has led to a number of speculations and rumors about the racing series’ future. Liberty Media, whose chair is billionaire John Malone, took control of the global racing circuit through a deal valued at $8B. The September announcement led to uncertainty about the future of the series. F1’s rise to become the biggest annual global sporting series is closely connected to CEO Bernie Ecclestone. The former used-car dealer, however, is in his mid-80s and seems on his way out. One of Liberty Media’s first moves was to install former 21st Century Fox vice-Chair Chase Carey as F1’s new chair. The new ownership is expected to lead to an increased focus on the U.S. market, which currently hosts only a single grand prix. The U.S. has been virtually irrelevant to F1 over the past 30 years as the fan interest has never been able to compete with local racing series NASCAR or IndyCar. More U.S. races and an increased focus on digital media could change that. Reports of an F1 OTT channel have also been circulated as F1 has been dealing with declining audience figures over the past several years. F1’s previous owner CVC Capital bought the racing series for $1.1B in ’06. The off-track future of F1 will continue to be a hot-button issue in ’17. Despite this uncertainty, the racing series was also able to score a new global partner earlier this year. Dutch beer brand Heineken reached a five-year deal with the series, valued at $150M.
ASIAN MONEY: As many as 15 companies were reportedly interested in the racing series. One of them was China Media Capital. While the public equity firm ultimately lost out, it shows that no sports property seems too big for Chinese investors. After a spending spree in ’15 that saw China’s Dalian Wanda acquire Swiss agency Infront Sports & Media as well as a 20% stake in La Liga side Atlético Madrid, among others, Asian investors continued to gobble up European sports properties. The most sought-after target of these investors has been English football. West Bromwich Albion, Birmingham City, Wolverhampton and Aston Villa were all sold to Asian investors during the past 12 months. Even Liverpool, currently owned by Boston-based Fenway Sports Group, was linked to a Chinese investment group. On the corporate sponsorship front, Japanese e-commerce company Rakuten agreed to become FC Barcelona’s new shirt sponsor in a deal that could bring in as much as $65M annually for the club.
TOP DOLLAR: On the media front, the 2016 Rio Olympics and Euro 2016 dominated broadcast ratings across the continent. In Germany, Europe’s biggest TV market, Euro 2016 broadcasts featuring “Die Mannschaft” easily drew more than 10 million viewers. The Olympics also drew millions of Europeans despite the six-hour time difference with the Brazilian city. Questions about sporting integrity, which erupted after Russian athletes were accused of widespread doping, did not hurt TV ratings. Doping has especially tainted track and field and swimming, the two anchor sports of every Summer Games. In terms of new media deals, the Bundesliga closed the gap with the EPL by securing a new four-year, €4.64B domestic broadcast rights agreement starting in ’17. The figure represents an 85% increase on the current rights deal, and also sees Eurosport breaking Sky’s stronghold of all live game broadcasts. The pan-European sports network, a division of U.S. company Discovery Communications, will air 40 live Bundesliga matches per season.
Other big sports business stories in Europe in ’16:
- The ongoing saga over the sale of Serie A side AC Milan to Chinese investors.
- Rome joins Hamburg and drops out of the race to host the 2024 Summer Olympics.
- FIFA President Gianni Infantino pushes ahead with proposal to expand World Cup field.