Liberty Media, the media investment group owned by John Malone, is closing in on a deal to take a significant stake in Formula One in a deal that would value the racing car series at between $8bn and $9bn.The US company is in advanced talks with CVC Partners, the private equity group which controls F1’s parent company, according to several people briefed on the deal. They said it could be announced within the next two weeks.
If completed, the transaction would end months of speculation about the future ownership of F1 and could mark a turning point for a sport which — while hugely popular on television — has been criticised by fans for being too predictable and for failing to modernise.
It would also be a landmark deal for Liberty Media which would secure the prize only after a number of parties had kicked the tyres over the sports franchise over the past year.
Liberty became the frontrunner after seeing off recent interest from private equity group Silver Lake and US talent agency WME-IMG.
People at the European broadcaster Sky said it had taken a close look at a deal with CVC but was no longer pursuing its interest. A person close to Qatar Sports Investments, the majority shareholder in football club Paris Saint-Germain, said it had also considered an offer but had backed away weeks ago.
According to people briefed on the talks, Liberty plans to take a 10-15 per cent stake in F1’s parent company initially for between £1bn-£2bn, with an agreement to take full control of the business further down the line.
The people also confirmed reports that Chase Carey, the executive vice-chairman of Rupert Murdoch’s 21st Century Fox, would become chairman of F1, replacing Peter Brabeck-Letmanthe, who is also the chairman of Nestlé.
A deal would be second time lucky for Mr Malone’s global media empire, which came close to buying a 49 per cent stake in F1 in 2014 through Liberty Global and Discovery Communications.
This time, the deal is being driven by the US media investment group headed by chief executive Greg Maffei. If successful, it would give Liberty the chance to own one of the most profitable global sports as well the opportunity to exploit its valuable international TV rights and its virtually untapped digital and social media rights.
CVC has controlled F1 for nearly 10 years, but has reduced its stake, notably in 2012 when it sold $1.6bn of equity to BlackRock, Norges Bank and Waddell & Reed. The purchase has been one of the most successful private equity bets in history, returning roughly five times its initial investment.
A big question remains over the future role of F1’s longstanding chief executive Bernie Ecclestone, 85, who owns 5 per cent of the sport’s parent company. At the Italian Grand Prix at Monza this weekend, Mr Ecclestone told reporters that Liberty “are getting a lot of publicity” out of their deals.
When contacted by the FT, Mr Ecclestone declined to comment. People close to the deal said it was unclear whether he was in favour of a potential deal with Liberty.
Any change in the ownership of F1 will have to be signed off by the sport’s governing body, the FIA, although the initial proposal for Liberty to take a 10-15 per cent stake would not require its approval.
Story and photo published in the Financial Times