It is expected that there will be an announcement later today, or tomorrow about the sale of the Formula One group by CVC Capital Partners. The buyer is the US firm Liberty Media, or some vehicle belonging to it. The initial phase of the deal will involved the transfer of CVC’s 35.5 percent share to Liberty and the payment, I hear, of $1 billion. The actual amount of cash required to complete the deal is only around $4.4 billion because the debt that CVC has incurred which will, no doubt, be replaced by borrowings that Liberty will make. Who knows? Perhaps some of the debt will be paid off. This is not the sort of things that finance people tell the world. If the CVC shares go with all the conditions that existed prior to the sale we will see Liberty gradually picking up the shares of the others involved as it is believed that many of them have drag-along or tag-along clauses, which mean that they have agreed to sell when CVC sells. This means that they are committed to sell. Now, some may decide to ask Liberty if they can re-invest and thus there can be paper transactions with shares being converted into different shares, and in some cases there may be people who take money and shares. However, all of this will not happen until Liberty has run the while thing past competition authorities to see whether they have any objections. There is no reason that there would be problems with the sale, as long as this does not get mixed up with F1’s other competition issues, but there might be a question mark over the fact that Liberty also owns a chunk of Formula E. This should not really matter. Formula E is small potatoes in the stew of international motorsport and the fact that one group owns the commercial rights to two championships is not that exciting. If the rights of these two are bundled in the future perhaps it could be a problem, but united ownership will help to create a situation where races never clash and perhaps we can see some crossover between the two. It would be fun, for example, to see F1 stars take a weekend off and race in Formula E in guest appearances? One of the reasons that Malone has bought the sport is to get access to content that he can use for his many and varied TV networks around the world. He is not a content creator, but he does want to pull more viewers to his empire and using f1 is a good way to do it. If he can offer F1 for less than it is offered today, then he will find viewers. And he can also make sure that his rivals who want to sell F1 to their customers will have to pay more for the privilege. One would imagine that Sky will now have a bit of a rethink… One thing that Liberty will almost certainly do is to switch focus in F1 much more to the United States, where it has many millions of customers. This has got to be good for the sport because one can imagine that careful promotion in the US will create new revenues, as merchandising and such things will become more important. When you have the world’s biggest consumer market within your grasp, it makes no sense not to reach out. This has always been a weakness of modern Formula One, but to make it work will involve some more sensible race fees and more of a sense of investment. Under Liberty, I also see many firms deciding that they will want to get involved in F1 as sponsors. We will see. As to who owns what in the long term we don’t really know what has what rights to which shares. There are shares that used to belong to the now-defunct Lehmann Brothers empire that are earmarked for CVC. That is 12 percent, which is worth about $1 billion in theoretical value. There are also financial firms Waddell & Reed (20.9 percent), Norges Bank (4.5 percent), the Teachers’ Retirement System of Texas (4.5 percent), JP Morgan Whitefriars (3.0 percent) and Black Rock (2.6 percent). Then there are those with personal involvements: the Ecclestone Family trust fund(s), which are unrelated to Bernie Ecclestone, which own 8.5 percent. Bernie himself owns 5.3 percent. The two have to be careful to act as separate entities as the authorities are not keen on trust funds that do not acts trusts and governments are prone to impose taxes on such entities if they can prove collusion. There is Churchill Capital which got 0.7 percent for introducing Bernie Ecclestone to CVC Capital Partners. That may not sound much but it amounts to about $35 million. The FIA owns one percent of the business as well and that is worth about $44 million (on paper). However the federation has to now sell as it is bound by a drag-along deal. What happens to this money will be interesting. The last time the FIA made a big deal, it was all given to the FIA Foundation charity, but I don’t expect that to happen this time. Jean Todt would be smart to invest in the sport around the world. There are various directors and staff (and former staff) who own 3.3 percent of the business between them. Some of these will be surplus to requirements under the new regime. There was talk of the sport ending up being listed on the NASDAQ stock exchange, perhaps as part of a bigger entity, but it is hard to imagine that transparency will come easily to F1…

The big question that remains is whether or not the new owners will want to keep soon-to-be 86-year-old Bernie Ecclestone involved. I have no idea. He would be a useful man to have on-side because the new owners must get down to the business of negotiating a new commercial contract with the team teams for 2020 and beyond. Bernie knows how to push the teams around, although he has been less successful of late at this with Mercedes and Ferrari pushing back. The negotiation will not be easy but Liberty must understand that it will be best to give aways a little more and work with the teams and promoters rather than squeeze them until they squeak, as CVC has done. A little good will and working together will help F1 enormously. It is certain that change will now come, but the key point is what that change will be. Doing it the American way will be most interesting… There is so much room for development in the digital world, in merchandising and in customer relations.