The sale of Formula One was confirmed on Wednesday afternoon, as Liberty Media has revealed that they purchased a stake in the sport. The American company paid a reported $8.5 billion to acquire an 18.7% stake in the sport for the short term.
The Liberty Media Corporation, an American mass media company, has acquired stakes from CVC Capital Partners. Liberty Media has invested in many companies throughout the years including Sportsnet, Sirius XM Radio and DirecTV. The company has appointed Chase Carey, an American businessman who currently servers has the Executive Vice-Chairman of 21st Century Fox, to the position of F1 chairman. This bumps Peter Brabeck-Letmathe out of the position, although he will still maintain a position on the board.
CVC Capital Partners, which bought a majority stake in Formula One in 2006, comes out of the deal with estimated $6 billion. This is three times what the company invested a decade ago. The deal cost Liberty Media an estimated $8.5 billion. Approximately $4.4 billion was the cost of purchasing the equity and the remaining $4.1 billion was debt acquired from the sport.
Formula One’s commercial rights holder, Bernie Ecclestone, will keep his position as CEO. The 85 year old Brit recently told the press that he had been asked to stay with the sport for another three years.
CVC Capital Partners will remain part of the Formula One business, retaining 65% of the newly rebranded “Formula 1 Group”. However, the investment company will not control voting rights.
It’s unclear what a change in ownership with bring to the sport, although many are hoping for some big changes. It’s expected that the new American owners will attempt to stir up interest in the American market, which has not previously been a big market in Formula One. It is also reported that the company would like to bring Formula One to the stock market in order to allow additional investors into Formula One.
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