For those who haven’t been keeping up with Liberty Media’s recent share purchase in Delta Topco, the parent company of F1, the most recent development is that Bernie Ecclestone will retain his role as Chairman for at least the next 3 years, and that teams will be given the chance to invest in the sport with several having already expressed interests.
While spread betting players will have seen Liberty Media’s stock fall slightly in the last few days and may be tempted to shy away, several big investment funds are adding them to their portfolios as the future of the company suddenly seems a bit brighter. This could be a sign that for the first time, with Delta Topco having been a private company and therefore untradeable, that teams and the public can participate in the growth and decline of the sport (and potentially even turn enough of a profit to cover the expensive tickets for the races).
So who would take up the option? Well the major players are likely to be Mercedes, Red Bull, Ferrari and McLaren who all have the finances to be able to back it and will be looking to cement a stake in a business that has grown nicely over the last few years. The additional enhancements that will likely come from Liberty Media owning a large stake in TicketMaster and the addition of Chase Carey, who has worked alongside Rupert Murdoch for many years, will just be icing on the cake for the potential of the brand.
However, the race is far from the finish line, with the consent of the FIA and European Commission still needed to ratify the sale of the controlling stake, and a little caveat behind the scenes. Investment Group CVC Capital Partners invested $965.6m in 2006 in Liberty and courtesy of the recent events, look set to make a whopping 532% gain on their original purchase, generating a sizeable $6.1bn return. But, the interesting footnote is that CVC granted the FIA a 1% stake in Topco Delta 3 years back, and should the sale progress, the FIA stand to make nearly 100x their return. With financial interests a key metric in the validation of the sale, the fact that the Federation Internationale de l’Automobile will turn a large profit may be seen by some as a conflict of interest and create new hurdles to overcome.
To stay up to date with all the developments of the F1 controlling stake sale and spread bet a guess at what will happen to Liberty Media’s share prices, be sure to keep up with our blog and check out some of the leading spread betting brokers in the markets today.
