FIA and Liberty Media in spat over control of Formula 1

A ‘Bloomberg’ report citing a $20 billion Saudi takeover offer for the Formula One Group has opened a rift between the commercial rights holders and the International Automobile Federation

2022 Mexican Grand Prix
An image from the stands of the 2022 Mexican Grand Prix.AFP7 vía Europa Press (AFP7 vía Europa Press)

Netflix executives must be chomping at the bit to get their hands on the most recent Formula 1 spat. This conflict does not revolve around a title fight between Lewis Hamilton and Max Verstappen; neither does it center on the savage competition for a seat that has, for example, seen Daniel Ricciardo bumped off the grid in his new role as a third driver for Red Bull. In fact, the latest ruckus has not even occurred during the season but in winter, with not a single engine running. This is a purely political fight between Liberty Media, which owns F1′s commercial rights through the Formula One Group, and the International Automobile Federation (FIA). At stake is the management of a business that in just three years has gone from idling to turbocharged, and whose value has skyrocketed accordingly.

The fuse was lit last Monday by FIA president Mohammed Ben Sulayem, who voiced his concern about a Bloomberg report referencing a $20 billion offer by the Saudi Arabian Public Investment Fund (PIF) to take control of the Formula One Group, which was rejected by Liberty. The Saudi attempt to land a succulent global prize like F1 comes after several years of an aggressive propaganda policy by Riyadh of bidding to host major sporting events in a public image campaign aimed at using the exposure they provide to present a softer image. The Spanish and Italian soccer federations have staged Super Cup games in the Saudi capital in recent years and the Dakar Rally moved from South America to the Arabian deserts in 2020, while F1 added the Jeddah Circuit to its calendar in 2021, a year that also saw the completion of PIF’s takeover of Premier League club Newcastle United.

Few sports have soared in popularity in the same way F1 has since Liberty Media bought it in 2017 from private equity firm CVC Capital Partners in a $4.6 billion deal. Since then, Grands Prix have become universalized via several factors: the visibility provided by the Netflix series Drive to Survive; consolidation in the all-important US market, where up to three events will be staged in 2023 (Austin, Miami and Las Vegas); and F1′s new explosiveness on track, particularly through the revitalization of Red Bull, whose reigning world champion Max Verstappen has emerged as the ideal actor to play the role of Lewis Hamilton’s antagonist to create a rivalry worthy of the sport’s golden era. Even so, PIF’s offer represents a huge increase over the acquisition value, and such a differential in just six years of Liberty Media ownership is what prompted the FIA boss to appear on the scene.

“As the custodians of motorsport, the FIA, as a non-profit organisation, is cautious about alleged inflated price tags of $20bn being put on F1,” Ben Sulayem wrote on Twitter. “Any potential buyer is advised to apply common sense, consider the greater good of the sport and come with a clear, sustainable plan – not just a lot of money. It is our duty to consider what the future impact will be for promoters in terms of increased hosting fees and other commercial costs, and any adverse impact that it could have on fans.”

In response, last Tuesday Liberty Media issued a strongly worded letter from its legal department, suggesting Ben Sulayem had overstepped his authority in a matter that is neither his responsibility nor that of the organization he presides. “Formula One has the exclusive right to exploit the commercial rights in the FIA Formula One World Championship under a 100-year deal,” the letter stated. “Further, the FIA has given unequivocal undertakings that it will not do anything to prejudice the ownership, management and/or exploitation of those rights. We consider that those comments, made from the FIA president’s official social media account, interfere with those rights in an unacceptable manner.”

With the grid currently at a standstill, the excellent health of F1 at a sporting level has not been able to conceal the wound that has been opening up between the FIA, Liberty and the teams. Decades of understanding since the brawling that marked the world championship agenda in the 1980s appears to have been left behind. With no allies publicly expressing their support, and with several aspirants to take his place, Ben Sulayem’s position is beginning to look less than stable. Just this week, a British Liberal MP called him to order, accusing him of being inconsiderate for ignoring a letter signed by 90 MPs sent to him 10 months ago and highlighting the consequences of taking F1 to countries where human rights are not respected.

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