Malone eyes F1 stake
February 4, 2014
By Colin Mann
According to media reports both sides of the Atlantic, cable TV investor John Malone is considering taking a stake in the company that owns Formula One. Liberty Global, the international arm of Malone business, and Discovery Communications are working alongside Liberty Media to purchase as much as 49 per cent of Formula One Group from private equity player CVC Capital Partners. CVC owns some 35 per cent of F1, and any deal would likely value F1 at around $9 billion. CVC bought F1 in 2005-06 from its lenders, investing nearly $1 billion and using $2.5 billion of debt. Since then, CVC has returned more than five times its initial investment through the sales of shares to institutional investors in 2012 and dividends.
Discovery recently took control of Eurosport, which holds the rights to a range of four and two-wheeled action at levels below motor racing’s premier series. Such a move would put Malone the other side of the table when it comes to negotiating sports rights.
The news comes a week after Malone’s LGI acquired Dutch cable MSO Ziggo for $13.5 billion, while on his home turf, he is spearheading attempts to consolidate the US cable industry with Malone-backed Charter Communications tabling a $61 billion offer for Time Warner Cable.
Rupert Murdoch’s News Corp was considering taking control of F1 in spring 2011, at a time when German prosecutors had instigated an inquiry into an alleged $44 million bribe paid to F1 supremo Bernie Ecclestone by Gerhard Gribkowsky, a banker who facilitated the sale of F1 to CVC. Ecclestone is to face trial on bribery charges in Germany, likely to be in late April, following his indictment May 2013. CVC is thought to welcome an exit as a way out of the legal imbroglio.
At the time of the potential News Corp bid, Ecclestone warned Grand Prix teams that it would be “suicidal” for them if the sport moved to its subscription channels as part of a takeover deal.
Three years on, Ecclestone’s view has altered somewhat. “It depends what they want to do with it,” Ecclestone said of the sport’s rumoured new suitors. “If they want to control the sport through TV, it’s probably not good. But what sounded stupid a few years ago may not be stupid today. The world is changing so fast.”