MONZA, Itally (Reuters) – A sale of Formula One to Liberty Media is to go ahead next week, the sport’s commercial supremo Bernie Ecclestone told German trade magazine auto motor und sport on the sidelines of the Italian Grand Prix at Monza on Saturday.
Liberty Media Corporation (commonly referred to as Liberty Media or just Liberty) is an American mass media company controlled by Chairman John C. Malone, who owns a majority of the voting shares.
The magazine said that according to Ecclestone, Liberty Media will transfer the first of two tranches of payment in the $8.5 billion deal on Tuesday.
Recent media reports had said that British broadcaster Sky as well as a consortium of Liberty Media’s sister company Liberty Global and Discovery Communications were also circling Formula One.
Fiat Chrysler’s Chief Executive Sergio Marchionne earlier said the industry as a whole had a vested interest in stability for Formula One.
“I’ve had this conversation with CVC in the past, I’ve had it with Bernie … I think it’s important that we provide stability and a long-term view. I’m sure that will happen soon,” he said.
Auto motor und sport said Ecclestone left it unclear what role he would play once a deal had gone through. It quoted him as saying: “I will do what I have always done. What role I play is my decision.”
Formula One’s biggest shareholders are private equity firm CVC Capital Partners [CVC.UL] with a 35.5 percent stake and U.S. fund manager Waddell & Reed with 20.9 percent. Ecclestone holds 5.3 percent of Formula One and his Bambino Trust has another 8.5 percent.
CVC and Liberty Media declined to comment on the auto motor und sport report. Waddell & Reed was not immediately available for comment.
Liberty Media began in 1991 as a spin-off of TCI, an American cable-television group. Peter Barton, hired by TCI’s Malone, served as president until retiring in April 1997 to start an investment firm and spend time with his family.
The company took over TCI assets considered to have little value, but Barton completed “a deal every ten days for six years” and made the company a big success. Liberty was merged back into TCI in the mid-1990s.
On March 13, 1998, Liberty Media Group and TCI Group announced the merger of Encore and STARZ! into a single company – Encore Media Group, owned by Liberty. Encore was taking advantage of the growth of digital cable, while TCI, which had previously owned twenty percent of Encore, was more interested in traditional cable.
Liberty Media’s Discovery Channel and QVC continued to do well, but the company’s newer projects had problems, and the company’s stock price dropped by half.
Malone no longer had the “Malone halo” he once did. If AT&T agreed to spin off Liberty Media, new deals such as a possible News Corp. purchase of DirecTV would be easier because AT&T would no longer require federal approval to complete such deals.
Also in 2001, Liberty Media acquired the remainder of Liberty Digital and Liberty Satellite & Technology (formerly TCI Satellite). Both companies were independent spinoffs of TCI, though Liberty already owned 90% of both companies after the exchange for Sprint PCS stock. Being independent increased their asset values, but the stock prices of both dropped, negating any benefits.
Liberty Media subsequently spent $5 billion on nine German regional cable networks. Apart from television distribution it holds major interests in other groups. For example, it was the largest shareholder in News Corporation (though the founding Murdoch family owns more voting shares), and had a 4% stake in Time Warner.