F1 commercial rights holder Liberty Media has made clear it is not currently interested in selling the multi-billion-dollar sport.
At the time of writing, Formula One Group (FWONK) held a stock price of $74.39 compared to $21 when Liberty’s acquisition of the business took place in mid-2016, and was completed in January 2017.
That deal valued the sport then at $8 billion. Subsequent growth suggests current market value is around $28 billion.
It has led to Liberty Media CEO Greg Maffei insisting the company has no intention of walking away from a boom period.
“Given the tracking stock structure we have, the likelihood we would have a near-term seller is unlikely because we’d be incurring corporate-level tax,” explained Maffei.
“That’s anathema to us and would not be good for our shareholders.
“But more importantly, as far as what the opportunity is, we think it was kind of funny that some of the comments that the prices were allegedly discussed, you know, meetings that I never had, but okay…they didn’t seem like high prices at all.”
Liberty feels “there’s more to go” in F1
In January, reports emerged the Saudi Arabian Public Investment Fund had made a $20 billion offer last year.
That equates to a share price of $52.50, a figure the stock has traded above since October 2021.
The sport reportedly rejected the bid, prompting an exchange between Liberty Media and FIA President Mohammed Ben Sulayem after the latter suggested it was overvalued.
Maffei, however, insists that is far from the case, believing there is additional “huge opportunity” and that Liberty Media’s capital is in “a good place” for it to be.
“We think we’re going to compound well – we have compounded well,” assessed Maffei, speaking in a recent investor call.
“We bought in at $21 a share. I think it was mid-$70s this morning, mid- to low-$70s.
“It’s been a pretty good run. We think there’s more to go.
“We also think there are a lot of opportunities that are going to open up, potentially, for other places to put our capital.”
Referring to its decision to run and promote the Las Vegas Grand Prix later this year, Maffei added: “We’ve invested in Las Vegas, over $500 million. We think we’re going to get a very good return on that money.
“We’re going to see opportunities around the sport to grow elements and put our capital to work. (It) Could be M&A (mergers and acquisitions) related.
“We’ve looked at other things in the past that were around the sport where we thought we could be synergistic and add value.
“You’re constantly looking at those, and I think there are a couple now that are attractive.
“I think we will see more opportunities now in this kind of environment.
“We’ve excelled in the past, and I hope we can excel again.”
Discussion about this post