Tag Archives: Sports

Formula One: Liberty Media Corporation Agrees to Acquire Formula One – Press Release in Full


Liberty Media Corporation earlier today confirmed the agreement to acquire Formula One. The Liberty Media press release can be found in full here:

Liberty Media Corporation  and CVC Capital Partners (“CVC”) announced today that Liberty Media has agreed to acquire Formula One, the iconic global motorsports business, from a consortium of sellers led by CVC.

Liberty Media owns interests in a broad range of media, communications and entertainment businesses. Those interests are attributed to three tracking stock groups: the Liberty SiriusXM Group, the Liberty Braves Group, and the Liberty Media Group.

The consideration comprises cash and newly issued shares in the Liberty Media Group tracking stock (LMCK) and a debt instrument exchangeable into shares of LMCK. The transaction price represents an enterprise value for Formula One of $8.0 billion and an equity value of $4.4 billion(1).

The acquisition will be effected by Liberty Media acquiring 100% of the shares of Delta Topco, the parent company of Formula One (Delta Topco herein referred to as “Formula One”)(2). The acquisition is subject to the satisfaction of certain conditions and is described in more detail below.

Concurrent with the execution of the agreement to effect the acquisition, Liberty Media has completed the acquisition of an 18.7% minority stake in Formula One for $746 million, funded entirely in cash (which is equal to $821 million in consideration less a $75 million discount to be repaid by Liberty Media to selling stockholders upon completion of the acquisition). Prior to completion, CVC Funds will continue to be the controlling shareholder of Formula One.

After completion of the acquisition, Liberty Media will own Formula One and it will be attributed to the Liberty Media Group which will be renamed the Formula One Group. The consortium of sellers led by CVC will own approximately 65%(1)(3) of the Formula One Group’s equity and will have board representation at Formula One to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will be joining the Liberty Media Board of Directors.

Chase Carey has been appointed by Delta Topco and will serve as the new Chairman of Formula One, succeeding Peter Brabeck-Letmathe, who will remain on Formula One’s board as a non-executive director. Bernie Ecclestone will remain Formula One’s CEO.

Greg Maffei, President and Chief Executive Officer of Liberty Media, said: “We are excited to become part of Formula One. We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders. We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport.”

Chase Carey, Chairman of Formula One, said: “I am thrilled to take up the role of Chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team. I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world. I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike.”

Bernie Ecclestone, Chief Executive Officer of Formula One, said: “I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them.”

Donald Mackenzie, Co-Chairman of CVC, commented: “We are delighted Chase Carey is joining Formula One as its new Chairman and that he will be working alongside Bernie Ecclestone. Chase’s experience and knowledge of sport, media and entertainment is as good as it gets and we are very pleased to secure his services. Bernie has been a wonderful CEO for us over the last 10 years. There have been many successes and the occasional challenge but there has never been a dull moment and we have had a lot of fun. The combined skills of Chase and Bernie mean that the successes should continue and we wish them well. We would like to thank Peter Brabeck-Letmathe for his outstanding contribution during his tenure as Chairman. His leadership has served the company well, and we are pleased that he will remain on the board as a non-executive director.”

In the acquisition the selling stockholders will receive a mix of consideration comprising: $1.1 billion in cash, 138 million newly issued shares of LMCK and a $351 million exchangeable debt instrument to be issued by Formula One and exchangeable into shares of LMCK. Funding for the cash component of the acquisition is expected to come from cash on hand at the Liberty Media Group. The newly issued LMCK shares will be subject to market co-ordination and lock-up agreements.

The Teams will be given the opportunity to participate in the investment in Formula One, and the detailed terms of that investment will be agreed in due course. Certain teams have already expressed an interest in investing after completion of the acquisition.

The interest in Formula One already acquired by Liberty Media, and the remaining interest to be acquired upon the closing of the acquisition, along with $4.1 billion of existing Formula One debt (which will be non-recourse to Liberty Media) and $0.7 billion in Formula One cash, is being attributed to the Liberty Media Group tracking stock.

Upon completion of the acquisition, the Liberty Media Group will be renamed the Formula One Group and the ticker symbols for the Series A, Series B and Series C Liberty Media Group tracking stocks will be changed from LMC (A/B/K), respectively, to FWON (A/B/K), respectively. Formula One will remain based in London.

The completion of the acquisition is subject to certain conditions, including the receipt of: (i) certain clearances and approvals by antitrust and competition law authorities in various countries, (ii) certain third-party consents and approvals, including that of the Fédération Internationale de l’Automobile, the governing body of Formula One, and (iii) the approval of Liberty Media’s stockholders of the issuance of LMCK shares in connection with the acquisition and the name change of the Liberty Media Group to the Formula One Group, and is expected to close by the first quarter of 2017. Additional information regarding the acquisition and Formula One will be included in a proxy statement to be filed by Liberty Media with the Securities and Exchange Commission relating to the matters to be voted upon by Liberty Media’s stockholders described above.

Formula One: In-play odds reach Formula One

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In-play odds are nothing new to football fans who place bets online. For years customers have been able to bet on matches as a game evolves. With the evolution of mobile gambling apps the popularity of this functionality is one of the most significant growth areas for bookmakers.

Essentially, In-play gambling is achieved through a book maker constantly adjusting odds on factors within an event, whilst the event is taking place. In the case of football this can range from the overall result to who will score next, to whether or not a player will finish a match. Gambling within football has become so engrained within the sport it is possible to bet on almost any element of a game and do so live.

Frequent readers of this site will have seen I recently started posting gambling watch-outs or tips over a Grand Prix weekend such as this one for Monaco. In my preview I sighted Force India drivers Nico Hulkenberg and Sergio Perez as watch-outs for the weekend if the forecast rain arrived. As it transpired, the rain did come and Sergio Perez found himself in a possible podium position half way through the race. At this point I tweeted a question about what odds would be availble for Perez to win now and how great it would be if bookies offered in-play odds in Formula One. To my surprise William Hill replied, and confirmed they do in fact offer in-play odds in F1, and that the live odds for Perez at that time were 6/1, down from the 200/1 when I made my original forecast for the weekend.

Intrigued by this development, which as an F1 fan not adverse to a little (responsible) gambling from time to time, I made some enquires with William Hill to find how in-play / live odds evolve over an F1 race.

The graphs below illustrate the dynamic odds availble for the top 4 finishers of the 2016 Monaco Grand Prix. The time period involved is from the night before the race up until the final lap.

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For ease of illustration I have changed the odds to decimal rather than more traditional fractional. The figures shown represent the return a customer would see for a correct 1 (£,€,$) bet placed at the given times during the race. For reference I have added pointers to a number of influencing points in the race.

It is worth noting that at any time, a customer could place an each way bet on the result. This would lead to a payout at 1/5 of the odds offered for a win should the driver finish in 2nd or 3rd. This means that on the final lap of the race you could have placed money on Sergio Perez to win at 100/1, and been paid out at 20/1 for him securing 3rd place.

The growth of in-play betting in Formula One demonstrates that the sport is receiving attention from the broader sporting community. This development further necessitates live viewing. The gambling sector has a loud and powerful voice when it comes to the way in which sport is consumed by fans. It is possible growth of in-play F1 gambling as a revenue stream for the sport will serve to encourage Formula One Management to focus maximising audience size. In order to achieve this perhaps they will consider relaxing or reviewing pay TV fee structure in order to gain increased revenue from growth of the gambling sector.

To read my tips for the Canadian Grand Prix, click here.

To see my preview for the Canadian Grand Prix, click here.

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