07/09/2016
NEWS STORY
Media giant Liberty Media has confirmed that it is to buy Formula One in a deal worth $8bn (£6bn).
Initially, the company, which is controlled by John Malone (top right), will purchase an 18.7% stake for $746m (£560m), with the remainder of the buy-out scheduled for the first quarter of 2017.
After completion of the acquisition, Liberty Media will own Formula One and it will be attributed to the Liberty Media Group which will be renamed the Formula One Group.
The consortium of sellers led by CVC will own approximately 65% of the Formula One Group's equity and will have board representation to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will join the Liberty Media Board of Directors.
Chase Carey (right), the executive vice president of 21st Century Fox, is to be appointed chairman, succeeding Peter Brabeck-Letmathe, who will remain on Formula One's board as a non-executive director, while, as previously reported, Bernie Ecclestone will retain his position as Formula One's CEO.
The deal will see Liberty Media pay $1.1bn (£825m) in cash, $138m (£103m) in Liberty Media shares and $351m (£263m) worth of an exchangeable debt instrument which will be issued by Formula 1 and subsequently converted to Liberty Media shares.
In addition to owning Major League Baseball club the Atlanta Braves, the company has significant holdings in Live Nation, the largest live entertainment company in the world, satellite radio company Sirius XM Holdings and smaller investments in the likes of Time Warner and Viacom.
As part of the deal, Liberty Media will also assume Formula One's current debt of $4.1bn (£3.07m).
"We are excited to become part of Formula One," said Greg Maffei, President and Chief Executive Officer of Liberty Media. "We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders. We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport."
"I am thrilled to take up the role of Chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team," said Chase Carey. "I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world. I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike."
"I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them," said Bernie Ecclestone."
"We are delighted Chase Carey is joining Formula One as its new Chairman and that he will be working alongside Bernie Ecclestone," added Donald Mackenzie, Co-Chairman of CVC. "Chase's experience and knowledge of sport, media and entertainment is as good as it gets and we are very pleased to secure his services. Bernie has been a wonderful CEO for us over the last 10 years. There have been many successes and the occasional challenge but there has never been a dull moment and we have had a lot of fun. The combined skills of Chase and Bernie mean that the successes should continue and we wish them well. We would like to thank Peter Brabeck-Letmathe for his outstanding contribution during his tenure as Chairman. His leadership has served the company well, and we are pleased that he will remain on the board as a non-executive director."
The eleven F1 teams will be given the opportunity to participate in the investment in Formula One, and the detailed terms of that investment will be agreed in due course. Certain teams have already expressed an interest in investing after completion of the acquisition.
Upon completion of the acquisition, the Liberty Media Group will be renamed the Formula One Group, Formula One will remain based in London.
The completion of the acquisition is subject to certain conditions, including the receipt of certain clearances and approvals by antitrust and competition law authorities in various countries, certain third-party consents and approvals, including that of the FIA.