US media firm to buy Formula One for $8 billion

In a deal that ends years of speculation over F1’s future, Liberty said it had struck an agreement to buy out Formula One’s parent company from CVC Capital, and had already acquired a minority stake of 18.7 percent.

Liberty Media group will pay a total equity price of $4.4 billion in cash, newly issued shares, and exchangeable debt to complete the deal, which givesFormula One an enterprise value of $8.0 billion.

Liberty said it would keep Ecclestone, who built Formula One into a global operation over nearly four decades, as chief executive, but also named 21st Century Fox vice chairman Chase Carey as the company’s new chairman.

The takeover is set to be completed next year, subject to approval by regulators, Liberty Media’s shareholders and F1’s governing body, the Federation International de l’Automobile (FIA).

It gives Liberty control of a global and highly profitable sport which includes 21 races this year stretching from Melbourne and Shanghai to Sochi, Mexico City and finishing in Abu Dhabi.

Formula One rakes in billions from advertisers and broadcasting rights for what is one of the world’s most-viewed competitions.

It also earns millions from Formula One-branded merchandise. F1’s future under CVC has long been in question and a mooted share flotation in Singapore was shelved in 2012.

Despite the big profits, some F1 teams are plagued by financial problems and the sport faces challenges to its fanbase and TV viewership, with its races often criticised as predictable.

Ecclestone, a former motorcycle dealer and racing driver, has been the flamboyant figure at the centre of Formula One since the 1970s, crafting it into one of the world’s most glamorous and best known sports.

After months of talks with the sellers, Liberty agreed to retain the canny and combative 85-year-old, who insisted his role would remain unchanged despite the arrival of Carey as chairman.

“I will stay on as F1 chief executive,’ Ecclestone told the Autosport website. “I will continue to do all the things I have previously done, such as negotiate with the circuits, television companies and people like that.

“The good news is we will have someone on board in Chase, and he will hopefully be able to push F1 into new territories with social media. I have never found a way to make money from that.”