Formula 1

Liberty Media Firmly Committed to Formula One’s Future

Published

1 month ago

21/04/2023

Formula One has seen significant growth in recent years, with its current market value estimated at around $28 billion. Despite reports of a $20 billion offer from the Saudi Arabian Public Investment Fund earlier this year, the commercial rights holder Liberty Media has made it clear that it has no intention of selling the sport.

Liberty Media, which holds the commercial rights for Formula One, has stated that it has no intention of selling the sport, which is worth billions of dollars. As of now, Formula One Group’s stock price is $74.39, a significant increase from its value of $21 at the time of Liberty’s purchase of the business in mid-2016, which was finalized in January 2017.

The acquisition of Formula One in 2016 was worth $8 billion, but the sport’s recent growth indicates that its current market value is around $28 billion. As a result, Liberty Media’s CEO Greg Maffei has emphasized the company’s commitment to the prosperous period and stated that they have no plans to sell in the near future. Maffei further clarified that their tracking stock structure makes it unlikely to have a seller in the short term because of the associated corporate-level tax, which is against their interests and would not be beneficial to their shareholders.

Maffei also commented on the alleged prices discussed in some meetings that he never attended, stating that they did not seem like high prices for the opportunity at hand. He emphasized that the opportunity is more critical than the prices being discussed and found it amusing that such discussions were taking place without his knowledge.

In January of this year, there were reports that the Saudi Arabian Public Investment Fund had offered $20 billion to acquire Formula One. This amount translates to a share price of $52.50, which is a figure that the stock has traded above since October 2021. Nonetheless, despite the reported offer, the sport purportedly declined, resulting in a communication between Liberty Media and FIA President Mohammed Ben Sulayem. The FIA President suggested that the sport was overvalued, which prompted a response from Liberty Media.

Maffei strongly disagrees with the notion that Formula One is overvalued and sees significant growth potential for the sport. He believes that Liberty Media’s capital is well-positioned to take advantage of this “huge opportunity.” Speaking in a recent investor call, Maffei expressed confidence in their ability to compound their returns, given the success they have already achieved. He pointed out that they purchased the business for $21 per share, and the stock price has since risen to the mid-to-low $70s, which is a significant increase. Maffei remains optimistic about the future of Formula One and expects further growth to come.

Furthermore, Maffei believes that there are multiple opportunities for Liberty Media to invest its capital in areas other than Formula One. He also mentioned their recent decision to organize and promote the Las Vegas Grand Prix later this year, for which they have already invested over $500 million, and he expects a good return on that investment. Maffei thinks there will be other opportunities to grow different aspects of the sport and invest their capital, which may include mergers and acquisitions.

Maffei explained that Liberty Media has explored other opportunities in the past that would be synergistic and add value to the sport. They are constantly looking for similar opportunities, and Maffei believes that there are a couple of attractive ones at present. He anticipates more opportunities to arise in the current environment and expressed hope that they can excel as they have done in the past.

Liberty Media Formula 1 Eyes Investment Opportunities Beyond F1 Maffei Dismisses Overvaluation Claims Liberty Media Formula 1 Eyes Investment Opportunities Beyond F1 Maffei Dismisses Overvaluation Claims Liberty Media Formula 1 Eyes Investment Opportunities Beyond F1 Maffei Dismisses Overvaluation Claims Liberty Media Formula 1 Eyes Investment Opportunities Beyond F1 Maffei Dismisses Overvaluation Claims Liberty Media Formula 1 Eyes Investment Opportunities Beyond F1 Maffei Dismisses Overvaluation Claims