https://autoweek.com/article/formula-one/report-liberty-media-open-selling-formula-1
Hard to believe when they had such great ideas like this https://www.planetf1.com/news/teams-rejected-libertys-group-launch/ Image Unavailable, Please Login #F1isnotWWE
So, the cat is out of the bag now; in the face of adversity, Liberty is losing interest in F1. It's true that it's a business difficult to manage, but they seem to give up very quickly. I think the fact that no team wanted to take a stake in their business was already a reality check, a couple of years back. I don't know if F1 is still Worth what they paid for it (£8 billions ?). Bernie must be rubbing his hands, the old rascal !!!
When Liberty goes away look for much less emphasis in the US market. My guess is the new owners will look for easy growth in Europe and Asia first.
Not sure that it is really Liberty’s fault. The hybrid turbo era has been a snorefest with Mercedes having a built in dominance that Ferrari is only just beginning to dent, that blame rests on the FIA. At least every race has not been a forgone conclusion of which Mercedes will win unless they hit eachother like it was 2014-2016. Coupled with the millennials lack of interest in motorsports and most organized sports, it is a wonder that they are keeping F1 as relevant as it currently is. In retrospect the mistake was not recognizing that if Bernie is selling, them he knows trouble is on the horizon. Watch MotoGP instead and it becomes painfully obvious why new viewers are not flocking to watch F1. MotoGP races are much more unpredictable and still carry an element of danger. MotoGP is not trying to pretend it is socially and environmentally conscious, but it is just loud and exciting. While Marquez has been dominant the last few years, the individual races are usually very exciting. The rider can make a much greater difference that the driver in F1. I hope F1 can be saved and not mearly replaced by Formula E.
Liberty must have done some homework before buying into F1. They must have known the state of affairs, the present hybrid formula drawbacks, the manufacturers arms race, the plight of the small teams, etc... It's not like if they were conned into it; it was all plain to see. I think they miscalculated and paid far too much for that show. Then, most of their suggestions were turned down, so they are losing heart. I Wonder who will pony £8 billions+ to take it of their hands now , unless they sell it at a loss, which wouldn't surprise me.
Why would someone else buy it now? Unless they figure a way to better monarize a shrinking revenue stream and actually compell the FIA to allow F1 to be entertaining and exciting again. I think we were fortunate to be able to enjoy F1 when is was awesome and relevant, I am sad that those days seem to be gone.
Liberty can sell F1 without even asking its shareholders. FWONK documents state that Liberty "may dispose of assets of the Liberty SiriusXM Group, the Liberty Braves Group or the Formula One Group without your approval" Exclusive: Formula One Group Doesn't Own F1's Commercial Rights Company filings have revealed that shareholders in the Formula One Group have no direct claim to the lucrative commercial rights of the auto racing series as the Nasdaq-listed stock is not a separate legal entity and therefore cannot own any assets. Instead, the stock, which has the ticker FWONK, merely reflects the economic performance of F1’s commercial rights and its other assets which are actually owned by Liberty Media Corporation (LMC). It may sound like a technicality from the pages of business management course books but in fact it is far from it. One of the key consequences of this convoluted structure is that, perhaps surprisingly, LMC’s board of management can sell F1’s commercial rights, and even its parent company Delta Topco, without getting approval from stockholders. Stockholders don’t get a say in how much the assets are sold for and LMC’s board is not even required to select the option which would result in the highest value for them. Stockholders could be given shares in a baseball team or radio broadcaster as payment and there’s absolutely nothing they could do about it. LMC’s board has the power, in its sole discretion, to decide how to proceed and, given that Britain’s anti-trust regulator concluded that the company is controlled by its chairman John Malone, it puts an awful lot of responsibility in the hands of one man. Last week former 21st Century Fox president Chase Carey took over as F1's chief executive and chairman from long-serving boss Bernie Ecclestone. However, neither Mr Carey nor F1's deputy chair Greg Maffei really hold the keys to Liberty’s investment in F1. They are firmly in the hands of billionaire John Malone and it remains to be seen whether he is actually a supporter of the series or just in it for the investment. It is understood that since Liberty announced its takeover of F1 in September, Malone hasn’t been to a Grand Prix. A paddock pass was produced for him to attend the race in Mexico last year but was instead given to LMC’s chief financial officer Mark Carleton. If you thought that F1’s shareholder structure was complex and unclear under previous owner, the private equity firm CVC, you ain’t seen nothing yet. The best place to start is by making the point that LMC owns a diverse range of companies. In addition to F1, its portfolio includes the Atlanta Braves baseball team and radio broadcaster SiriusXM as well as stakes in event promoter Live Nation and media giants Time Warner and Viacom. Until April last year you could buy shares in LMC itself and that would give returns from all of these businesses. In April the LMC board decided to split the LMC shares into three completely separate stocks which can be bought and are listed totally independent of one another. They are known as ‘tracking stocks’ as they track the performance of the different groups of assets owned by LMC. They are the Braves Group, which primarily tracks the baseball team, Liberty SiriusXM Group, which tracks Liberty’s interest in the radio broadcaster, and the Formula One Group which tracks F1 as well as the stakes in Live Nation, Time Warner and Viacom. Details of this arrangement are buried in the thousands of pages of company documents which Liberty has filed with America’s stock market regulator the Securities & Exchange Commission (SEC). They state that “our tracking stocks, which are designated the Liberty SiriusXM common stock, the Liberty Braves common stock and the Liberty Formula One common stock, are intended to track and reflect the separate economic performance of the businesses, assets and liabilities attributed to the SiriusXM Group, the Braves Group and the Formula One Group, respectively. “While each group has a separate collection of businesses, assets and liabilities attributed to it, none of these groups is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Hence, holders of our Liberty SiriusXM common stock, Liberty Braves common stock and Liberty Formula One common stock have no direct claim to the relevant group’s assets.” So although stockholders of FWONK may think they are getting a piece of F1 itself this is not the case. In fact they aren’t even getting shares in a company at all and they have no direct claim on F1’s commercial rights, its logos or any other intangible assets. Likewise, any of Delta Topco’s tangible assets, like its high-tech broadcasting equipment and the company jet, are all far beyond the grasp of shareholders no matter how much stock they own. The exceptions of course are Mr Malone and Mr Maffei who sit on the board of LMC and also own 3.1% and 1% of FWONK respectively. Again, if you’re thinking that this just sounds like a structure which was set up for accounting purposes and couldn’t have any actual effect on stocks, which are designated the Liberty SiriusXM common stock, the Liberty Braves common stock and the Liberty Formula One common stock, are intended to track and reflect the separate economic performance of the businesses, assets and liabilities attributed to the SiriusXM Group, the Braves Group and the Formula One Group, respectively. “While each group has a separate collection of businesses, assets and liabilities attributed to it, none of these groups is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Hence, holders of our Liberty SiriusXM common stock, Liberty Braves common stock and Liberty Formula One common stock have no direct claim to the relevant group’s assets.” So although stockholders of FWONK may think they are getting a piece of F1 itself this is not the case. In fact they aren’t even getting shares in a company at all and they have no direct claim on F1’s commercial rights, its logos or any other intangible assets. Likewise, any of Delta Topco’s tangible assets, like its high-tech broadcasting equipment and the company jet, are all far beyond the grasp of shareholders no matter how much stock they own. The exceptions of course are Mr Malone and Mr Maffei who sit on the board of LMC and also own 3.1% and 1% of FWONK respectively. Again, if you’re thinking that this just sounds like a structure which was set up for accounting purposes and couldn’t have any actual effect on stockholders then think again. The company filings make it clear that shareholders in the Formula One Group are actually “stockholders of Liberty Media Corporation, with a single board of directors and subject to all of the risks and liabilities of Liberty Media as a whole.” It is the latter part of this statement that could set alarm bells ringing as LMC owns such a diverse array of assets. Investors who buy shares in the Formula One Group may not have any interest in or knowledge of baseball or radio but they are subject to the risks and liabilities of them. In the worst-case scenario, if the Braves or SiriusXM got into severe trouble, creditors or authorities would have to pursue the legal owner, which is LMC, and Delta Topco could be exposed to that as it is one of its assets. There’s no evidence that SiriusXM or the Braves are in any kind of trouble but they could be in future and that is the risk and liability highlighted by the SEC filing. However, although stockholders in FWONK are subject to all of the risks and liabilities of LMC’s other assets, they don’t benefit from any boosts in their business performance as the tracking stocks only reflect the relevant assets. That’s not all. Liberty’s filings don’t hide from stockholders the fact that it “may dispose of assets of the Liberty SiriusXM Group, the Liberty Braves Group or the Formula One Group without your approval.” There is good reason for this. LMC is registered in the US state of Delaware where companies only need approval from stockholders “for a sale or other disposition of all or substantially all of the assets of our company taken as a whole.” The company filings add that “as long as the assets attributed to the Liberty SiriusXM Group, the Liberty Braves Group or the Formula One Group proposed to be disposed of represent less than substantially all of our assets, we may approve sales and other dispositions of any amount of the assets of such group without any stockholder approval.” As F1’s parent company Delta Topco alone is just one component of one of the groups there seems to be no need for shareholder approval if the LMC directors decide to sell it. The filings add that if the assets which are being sold represent “80% of the fair market value of the total assets of the disposing group” then LMC either has to pay the stockholders a dividend, pay the stockholders for their shares or give them shares in another LMC group. So if LMC’s directors decided to sell F1 not only would they not need to ask the shareholders but they could give them shares in the Braves or SiriusXM in return. If the directors decide to pay a dividend the filings don’t state whether it all needs to be paid to the stockholders though this seems most likely. Moreover, it isn’t clear what provisions need to be followed if the assets which are being sold come to less than 80% of the relevant group and this could apply to F1. FWONK has 217 million shares outstanding and they closed at $30.58 on Friday giving it a market capitalisation of $6.6 billion. Delta Topco comes to around 67% of this as LMC paid $4.4 billion for the business. Perhaps ominously, the filings state that in cases when the directors are deciding how to remunerate the stockholders after a sale, “holders of the disposing group’s common stock may receive less value than the value that a third-party buyer might pay for all or substantially all of the assets of the disposing group. Our board of directors will decide, in its sole discretion, how to proceed and is not required to select the option that would result in the highest value to holders of any stock related to a particular group.” Seasoned F1 followers may say at this point that the sale of F1 is not as simple as that because auto racing’s governing body the Fédération Internationale de l’Automobile (FIA) can terminate the commercial rights if it doesn’t give its consent to a change of control of Delta Topco’s subsidiary SLEC Holdings. However, that right was waived once SLEC became ultimately owned by LMC as it is a public company despite the fact that its shares are split into three tracking stocks. Testimony to this, the filings state that closing the deal was dependent on the FIA providing “written waivers, amendments or consents...with the collective effect that, changes in ownership and other transactions regarding the equity ownership of any direct or indirect publicly-traded parent company of SLEC Holdings will not constitute a change of control for which FIA France or FIA Switzerland would have a right to terminate.” Investment professionals will no doubt have poured over every page of Liberty’s filings, as we have, but it is less likely that the F1 and fan community will have had the time to do this even though they may well be interested in buying FWONK shares. The bottom line is that Liberty has an even stronger grip on the wheel than was originally thought. Time will tell whether it is a concept which appeals to the public. https://www.forbes.com/sites/csylt/2017/01/29/exclusive-formula-one-group-doesnt-own-f1s-commercial-rights/#1e1f00766367
Ahead of the new F1 season there is already disquiet among the promoters about the current state of the sport and the direction it is taking... Image Unavailable, Please Login
To provide an impression of disorder to the teams who are considering issues as budget cap from Liberty. Hack blog perfect for releasing this data. De-stabilize possibly at height of prep for the new season. Teams like order from the manager of the series.
CVC was much, much less involved in the actual operation of F1 than Liberty. Liberty has the potential to do much more damage to the sport than CVC because it's not just an investor.
Formula 1 owner Liberty Media has been criticised by grand prix promoters for the direction it is taking, after taking the unusual step of issuing a statement to express concerns. Amid ongoing uncertainty about the fate of five races, with the British, Italian, Spanish, German and Mexican GP contracts expiring this year, there has been a growing unity among the race organisers about the need for things to change. A Monday meeting of the Formula One Promoters' Association took place between representatives from most F1 races, although Autosport understands that the GPs in Russia, Japan, Bahrain, Abu Dhabi and China were not part of the discussions. Prominent among the worries are that F1's move to more pay-TV will slash the number of viewers, and therefore those interested in buying tickets, plus questions about why some events were being offered better financial terms. In a statement issued by FOPA on Monday night, the body said that there were three key issues for 16 of its members: It is not in the long-term interest of the sport that fans lose free access to content and broadcasting. There is lack of clarity on new initiatives in F1 and a lack of engagement with promoters on their implementation New races should not be introduced to the detriment of existing events although the association is encouraged by the alternative business models being offered to prospective venues. The statement added: "As we enter a new season of the sport that we have promoted for many decades, the promoters seek a more collaborative approach to the development of the championship and the opportunity to offer their experience and expertise in a spirit of partnership with Formula 1 and the FIA." The statement about alternative business models is understood to reference efforts to pull off a Miami street race. During the discussions, it emerged that the US-race promoters had been offered a profit share partnership, rather than the more traditional model where races pay tens of millions of dollars for the right to hold the event. The Miami situation is understood to have been a key factor in encouraging the events that do not have deals beyond this year to stand firm and demand better financial terms. Image Unavailable, Please Login British Grand Prix promoter Stuart Pringle, who is boss of the Silverstone track which activated a break clause in its British GP contract, warned against free deals to new races when existing ones like the United States GP in Texas (pictured above) are trying to make their event pay. "If this continues, Formula 1 will be racing on second-rate circuits, if any at all," Pringle told The Daily Mail. He added: "Everyone is disgruntled. Liberty's ideas are disjointed. "We have all been compliant and quiet hitherto, but we have great concerns about the future health of the sport under the people who run it now." Liberty Media has declined to comment on the matter, but it is understood it is due to meet all promoters today (Tuesday) for a meeting to discuss matters. https://www.autosport.com/f1/news/141231/f1-race-promoters-criticise-liberty-direction
Nah, the CVC stewardship was truly disastrous and did extensive long term damage. Indeed there were much less involved...precisely because they didn't care one iota about the sport beyond it's short term ability to generate huge sums of quick cash...causing Ecclestone to chase governmental funds and sell off the calendar to the highest bidder. No vision, and zero investment in or care for the long term health of the sport. When CVC took over in late ~2005 that's when the rot really started to accelerate. Mark Hughes: Pretty much every one of F1’s current ailments – on track and off - go back to [the CVC] buy-out. Max agreeing that it was a good idea to grant those rights for such a valuably long time has caused the sport to be financially raped ever since. Without that, there’d have been no need for the technical sterilisation of the sport (engine freezes, spec tyres, etc), the phoney ways of trying to please the new, less hardcore audiences or the ever-increasing presence of pay drivers on the grid – and more than half of the teams would not be in a financially perilous state. Liberty seem a bit clueless and misguided at times, but they inherited a sport that was already deeply broken on numerous levels.
