Will Formula One Turn Into Bore-Mula One After Being Sold For £6.6bn?
So Formula One as an entity, organisation, group the whole show has changed ownership. Liberty Media, a US media conglomerate, purchased F1 for £3.3bn, as announced a few days ago. Liberty Media will also take on Formula One’s debts, the total paid will be almost £6.6bn.
Any business in any industry is subject to a takeover, Formula One is like any business and has changed hands a few times over the course of its history.
The current/previous owners are/were CVC Capital, a private equity company. A private equity firm has one goal, to mange multiple investments through leveraged buyouts.
For a private equity firm such as CVC Capital there is no danger of sentiment, such firms see only profit/loss and return on investment.
So perhaps a change of ownership to a full blooded media company will be a perfect fit. Liberty Media runs and owns the Virgin Media Group and has the Discovery Channel as part of it’s suite of media companies.
But don’t expect Liberty Media to be any more sentimental about Formula One. For now F1’s ringmaster, Bernie Ecclestone remains in his current position.
Ecclestone, like Ron Dennis, is a grand master of wheeler-dealers who operates effectively in the new digital age.
However Eccelstone admits that Formula One needs to embrace this digital age more than it currently does and the deal with Liberty Media should accelerate this transition.
Liberty Media have made a point of retaining Ecclestone for another 3 years. In the mean time Liberty Media have appointed a new Chairman, Chase Carey
Chase Carey is Harvard University graduate and currently the Vice Chairman of the Rupert Murdoch empire 21st Century Fox.
The difference between Carey and Ecclestone is that Ecclestone is a multi-billionaire who made his fortune with a degree from the university of life. Carey is comfortably well re-numerated.
Fromula One has been run by Bernie Ecclestone for 40 years, he calls the shots, brokers numerous deals be it TV or how the sport is governed. And that’s why Liberty Media need him more than Ecclestone needs Formula One.
The biggest problem with the take over by Liberty Media is that both sides still believe that Formula One has a future in the USA. It doesn’t and it never will.
If Ecclestone couldn’t make F1 work in the USA then what chance has Liberty Media got. The US market prefers Nascar and a little bit of Indycar.
You can’t change over 50 years of US motorsport heritage in a few years, it’s not that it won’t work its because Nascar is the DNA that bonds American motorsport fans.
Formula One in America is still exotic, an acquired taste, so no matter who owns Formula One the same issues will still exist.