Top 20 Stories of 2016
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Top 20 Stories of 2016

Top Stories of 2016, #2: Liberty Media takes command of F1

Our second biggest story of the 2016 motorsport season is that of US company Liberty Media purchasing a controlling interest in Formula 1, ending years of speculation about the sport's future ownership.

Top Stories of 2016, #2: Liberty Media takes command of F1
Lewis Hamilton, Mercedes AMG F1 W07 Hybrid leads at the start of the race
Chase Carey, Formula One Group Chairman
Bernie Ecclestone, with Chase Carey, Formula One Group Chairman and Flavio Briatore
Nico Hulkenberg, Sahara Force India F1 VJM09 and Max Verstappen, Red Bull Racing RB12 at the start of the race
A giant United States flag
Chase Carey, Chairman of Formula One Group talks with Dr Helmut Marko, Red Bull Racing Team Consultant
Lewis Hamilton, Mercedes AMG F1 W07 Hybrid leads at the start of the race
Chase Carey, Formula One Group Chairman with Bernie Ecclestone and Christian Horner, Red Bull Racing Team Principal
Chase Carey, Formula One Group Chairman

At the start of September it was announced that cable king John Malone - through his Liberty Media group - had made a successful bid for the ownership of F1 parent company Delta Topco, and that the multi-phase takeover process was underway.

The news was welcomed in the paddock, where discontentment with previous owners CVC had grown exponentially in recent years, the private equity firm even being accused of “raping the sport”.

Malone has a reputation as a long-term operator able to move with the times - having taken early notice of the opportunities in cable television, the billionaire with approximately three times the personal wealth of Bernie Ecclestone was also quick to see the wisdom in providing content creation in addition to service delivery to maximise income.

CVC had been looking to offload its stake in the sport for several years, and following the indefinite postponement of the planned Singapore IPO in 2012 had been in ongoing negotiations with potential purchasers including two Malone companies: Liberty Global and Discovery Communications.

In the meantime, CVC had been slowly divesting small portions of their controlling stake in F1, selling minority stakes to external investors including BlackRock Inc., Reed & Waddell Financial Inc., and Norway’s sovereign wealth fund.

Liberty (via both the Liberty Global and the Discovery Communications arms) had been on the list of potential new owners since 2014, but given that the same period had also seen extensive coverage of possible deals with a US-Qatari consortium involving Miami Dolphins owner Stephen Ross, the Liberty name had simply been one on a list of rumoured potential purchasers that at one point also included Apple.

The incoming owners have big plans for Formula 1, and are looking to improve the sport’s profile in their home base of the United States with a view to adding at least two more races on the contiguous 48 states, while also developing a stronger - and more flexible - presence on social media and bringing the sport closer to the fans.

“Formula One is a great business, a great franchise and we want to build on that,” said incoming chairman Chase Carey at the time of the takeover announcement.

“I see that there is opportunity too for stepping up by investing in all sorts of areas - some of the historic areas in making the racing great, making tracks more exciting than ever; investing in marketing the sport so that it connects with fans in the right way; investing in new platforms - digital platforms - that really are able to connect to the fans with the information that they really want, taking advantage of everything that the sport has to offer.”

At present, Liberty hold a 19.1 percent stake in Formula 1, and is currently awaiting the result of the forthcoming shareholder vote before pressing ahead with the rest of the takeover, which is expected to proceed in three stages.

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