The Braves have a new corporate teammate: the Formula One auto racing series.
Braves owner Liberty Media, in a sports deal many times larger than its acquisition of the baseball team nine years ago, this week announced a $4.4 billion deal to buy Formula One.
Liberty, by comparison, paid $450 million for the Braves. The team is now valued at $1.175 billion by Forbes.
“We are very excited … for Liberty to acquire Formula One,” Liberty Media CEO Greg Maffei said on a conference call. “Formula One … has a massive fan base with over 400 million unique TV viewers globally and a highly, highly attractive financial profile. We are excited to become long-term owners of this strategic business, and we are confident that our expertise in media, entertainment, digital and live events will prove additive.”
Unlike its acquisition of the Braves – in which Liberty basically delegated control of the team’s operations to its existing management led by Chairman and CEO Terry McGuirk — the Colorado-based company immediately installed a new chairman of Formula One: long-time media and sports executive Chase Carey.
Carey said he looks forward to working with Formula One CEO Bernie Eccelstone, who has led the racing giant for decades, “and we both agree there is an opportunity to continue to build this business and take it to the next level.”
Formula One gets revenue from race-hosting fees, broadcasting deals, advertising and sponsorships. Race promoters host the races under license agreements and receive revenue from ticket sales. The Formula One series currently consists of 21 races in 21 countries and five continents. Its next event is the Singapore Grand Prix on Sept. 19.
Liberty Media issued a publicly traded tracking stock this year tied to the Braves, and the company said it plans to tie a separate tracking stock to Formula One.
The purchase is slated to close in two steps, with Liberty taking an 18.7 percent stake in Formula One this week and assuming full ownership in the first quarter of next year. In all, Liberty Media will pay $1.1 billion in cash plus 138 million newly issued shares of Liberty stock and $351 million in a debt instrument — a total of $4.4 billion. Funding for the cash component is expected to come from Liberty’s cash on hand, the company said.
Including Formula One’s existing $3.6 billion in debt, which will remain in place, F1 has a total enterprise value of $8 billion, Liberty said.
“The opportunity is to grow and develop the sport,” Carey said, “by increasing promotion and marketing of Formula One as a sport and brand; enhancing the distribution of content, especially in digital, currently a very small percentage of revenue; evolving the race calendar … and leveraging Liberty’s expertise in live events and digital monetization.”
In addition to the Braves and Formula One, Liberty Media — controlled by cable TV pioneer John Malone — owns stakes in a wide range of businesses, including satellite radio provider SiriusXM and entertainment company Live Nation.
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