Formula One’s new owner Liberty Media has said that teams are to be given a chance to buy a stake in the sport.As part of their takeover of Formula One Management, Liberty has proposed offering 20 per cent of the shares still owned by previous majority shareholder CVC Capital Partners at a cost of $22 a share – but with the proviso that no team can purchase a stake bigger than five per cent. A one per cent stake in Formula One would cost around $40 million.
Teams that buy into the sport would share in the annual profits generated by the business – but crucially, they would not have any voting rights in decisions relating to strategy, technology, marketing, prize money distribution or the appointment of senior officials such as the sport’s CEO or technical director.
The teams have until the end of January to decide whether to take up the offer, before the shares are offered to a wider pool of investors.
Before then Liberty shareholders are due to vote on the full takeover deal on January 17, while the EU Commission is scheduled to rule in March on whether Liberty’s takeover meets European competition guidelines and can be given permission to proceed.
Large teams such as Ferrari, Renault, Red Bull and Mercedes will likely have the necessary funds available should they wish to buy shares, but teams at the other end of the grid such as Sauber, Force India and Williams are unlikely to be able to afford the investment.
However, buying into the sport might not be a great investment after it emerged that the valuation of the sport has fallen by several hundred million pounds since the sale to Liberty was announced.
Corporate financial statements from Ferrari – which owns a small stake in Formula One’s Jersey-based parent company Delta Topco – appeared to value Formula One at £4.1 billion two months before the sale, but this was revised downwards to just £3.8 billion in September after Liberty acquired its majority stake for an estimated £3.6 billion.