Meet the new boss. Same as the old boss. Though the exclusive Formula One race series has been sold to a U.S. media conglomerate, at least one thing will stay the same: controversial CEO Bernie Ecclestone will remain the CEO of the powerful motor sports empire.
But whether there could be other changes in store remains to be seen now that the Colorado-based Liberty Media Group has purchased F1 for $8 billion. One of the big questions is whether Liberty will take steps to increase the popularity of Formula One in the U.S. market where interest lags compared to Europe and many other parts of the world.
“We are excited to become part of Formula One,” said Greg Maffei, the CEO 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.”
(Jaguar returns to racing with new I-Type battery racer. Click Here for more.)
Founded in 1991 as a spin-off of the cable TV group TCI, Liberty has been a voracious deal-maker with tentacles in a wide range of businesses, everything from TV and cable to sports, the company owning the Atlanta Braves. It has a controlling stake in satellite broadcast SiriusXM, and even operates MacNeil/Lehrer Productions, a venture started by the two former PBS Newshour hosts.
While founder and Chairman John Malone still calls the shots on big deals like the F1 acquisition, Chase Carey will be chairman of the racing empire under Liberty. Carey had been serving as executive vice-chairman of 21st Century Fox and seen by many as a potential successor to Fox chief Rupert Murdoch.
Under the complicated deal, Liberty starts out with an 18.4% stake in Delta Topco, currently the parent of F1. That will eventually grow to 100% — if, that is, the Colorado conglomerate meets a series of hurdles, including winning approval from FIA, the motorsport group that oversees Formula One.
And, even then, the current controlling investor in F1, CVC Capital, will retain a stake. The investment group will not only remain on the Formula One board but also get a seat on Liberty’s board of directors.
The cash and stock deal – which includes assuming $4 billion in F1 debt — is only likely to burnish the reputation of Bernie Ecclestone, a man who has long earned a reputation as the ultimate survivor. Despite a long string of controversies, including bribery charges in Germany he was able to settle with a fine, the 85-year-old British native will remain chief executive of the Formula One Group that effectively manages the race series and controls its commercial rights.
(Click Here to learn how Bernie bought his way to freedom.)
Ecclestone began as a competitor and then a manager of several drivers. He took over the Brabham team in 1972, running it for the next 15 years. He secured control of F1 by handling negotiations for the television rights back in the 1970s.
“I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them,” Ecclestone said after the deal was confirmed.
But while Formula One is wildly popular in Europe and many other parts of the world, it has struggled in the United States, taking a back seat to local race programs like IndyCar and NASCAR. North American race venues have moved around repeatedly, making it difficult to develop the sort of followings seen in Britain, Germany and Italy, as well as parts of the Mideast, Japan and China.
That will be one of the hurdles that Liberty Media will have to address to win approval for its planned, full acquisition. There are other challenges. Even in Europe, TV ratings have fallen under CVC’s stewardship. The series has been blasted for a number of issues, including powertrain rule changes and a frequent lack of real competitiveness among teams.
F1 has had trouble winning over younger audiences. And there has been near constant bickering, in recent years, among participating teams. The high cost of competing in the series has been one of the biggest concerns.
Whether Carey, Ecclestone and the rest of the new Formula One empire can put things back in gear is far from certain.
(Is this Robocar the future of racing? Click Here for more.)