The Formula One sale to Liberty media is to go ahead next week. The German trade magazine Auto Motor Und Sport was informed of this by Bernie Ecclestone, chief executive of the Formula One group. The comment was made to the magazine during qualification for the Monza Grand Prix in Italy Saturday.
The Formula One group is responsible for promoting the Formula One World Championship, and for exploiting the commercial rights it owns. The ultimate owner is Delta Topco. This is a Jersey firm that is 70% owned by CVC Capital Partners’ funds. J.P. Morgan owns another 20%
The Group is owned ultimately by Delta Topco, a Jersey-based company owned by CVC Capital Partners’ funds (approximately 70%) and JPMorgan (approximately 20%). Bernie Ecclestone’s family trust owns the remainder apart from small shares held by financial advisers and Ecclestone himself.
Ecclestone informed the magazine that Liberty Media will shortly transfer the first of two payments for the deal on Tuesday. The total deal is for $8.5 billion. Liberty Media is an American mass media company run by majority voting shareholder and Chairman John C. Malone.
Ecclestone’s position in F1 is unclear, although many in the industry believe his influence is essential if Formula One is remain as popular a sport as it has become under his tenure. When asked, he commented “I will do what I have always done. What role I play is my decision.”
However, questions are being asked about whether F1 is being marketed as effectively as it could be. Four years ago, it was revealed that Formula One was raising about the same TV income as the Turkish football Premier League. It must be worth more than that!
What is the business connection between the Formula One sale and CVC? The largest shareholder in Formula One is CVC Capital Partners, a private equity company. CVC holds 35.5% of F1 shares. Next comes Waddell & Reid, an American fund manager. It owns 20.9% of the company. Ecclestone’s Bambino Trust owns 8.5% while Bernie Ecclestone himself owns 5.3%.
Liberty Media has been after Formula One for some time. In a 2014 edition of the New York Post, Claire Atkinson revealed that F1 was privately discussing the issue with CVC.
The Daily Telegraph in the UK later confirmed this (one day later!) while also stating that Discovery Communications and Liberty Holdings had been seeking information about the finances of Formula One. Sky has also been nosing around the company.
Back in March, a UK Sunday newspaper informed readers that a price had been agreed. In June, London UK newspaper City A.M. revealed that the valuation of Delta Topco had shot up by 8.8% to $9.1 billion in the first Jan – March quarter of 2016. This was a record for the company. There had to be a reason for this.
It seems certain that the documents will be signed Tuesday. Confirmation from Formula One and the buyer and an announcement on the Formula One sale for the media are expected after the Tuesday signing.
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