Liberty Media says it has reached an agreement to buy the Formula One auto-racing franchise for $4.4 billion.
As NPR’s Yuki Noguchi tells our Newscast unit, the U.S. cable giant “has been on a buying spree, and this acquisition bolsters its sports offerings.” Here’s more from Yuki:
“Liberty Media is part of the growing media empire controlled by cable-TV pioneer and billionaire John Malone. Malone’s properties expanded in the last year to include Time Warner Cable.
“His Discovery Communications and Liberty Global have also been expanding geographically and into more sports-focused programming, where much of the cable-related advertising money is made. And that is where Formula One fits in with Liberty Media. The franchise makes money through TV rights, sponsorships and deals with teams.”
Liberty is acquiring the franchise from CVC Capital Partners, “a private equity firm that purchased London-based Formula One a decade ago,” Yuki reports.
Liberty says it has already acquired “an 18.7% minority stake in Formula One for $746 million,” paid in cash. Liberty says expects to complete the deal by acquiring 100 percent of the shares of Formula One’s parent company, Delta Topco, by the first quarter of 2017.
The cable giant has said it sees an opening to expand Formula One’s digital offerings. As Bloomberg reports, Liberty Media’s CEO called Formula One’s digital operations “underdeveloped” in a conference call and said “that the company would look to harness technologies like virtual reality and video games in an effort to develop the fan base and generate new sources of revenue.”
Chase Carey, formerly with 21st Century Fox, will be the new chairman of Formula One. “There’s interest in this sport around the world,” Carey said in a conference call, according to Bloomberg. “We want to continue to intelligently explore the opportunities to continue to grow it.”
Formula One’s longtime CEO, Bernie Ecclestone, will continue in that role. As Reuters reports, the “controversial figure” has “transformed the sport into one of the world’s richest.” But at the same time, the wire service writes, he has “not groomed a successor and critics have accused him of holding back the sport thorough a failure to embrace fully new media or the digital marketplace.”