Formula 1

Teams request clarity on F1 plans post 2020, before committing to Liberty shares

2 Mins read
World © Octane Photographic Ltd. Chase Carey - Vice Chairman of the 21st Century Fox media conglomerate and the Chairman of the Formula One Group/Liberty Media with Bernie Ecclestone and Christian Horner - Red Bull Racing. Saturday 26th November 2016, F1 Abu Dhabi GP - Paddock, Yas Marina circuit, Abu Dhabi. Digital Ref : 1764LB1D9553

When new F1 owners Liberty Media took over the sport recently, they put forward the idea of allowing teams the option of purchasing a stake in the company.

It currently has shares set aside for sale to the F1 teams should they wish to purchase them, which it will hold for six months.

There was not much interest forthcoming from teams to start with, as they were keen to know more about what they were actually getting themselves into, before making the substantial investment required to take up the deal. The teams asked Liberty for more time and information to allow them to mull the deal over, to which they duly obliged by extending their original deadline.

As it stands currently, there is not really much incentive for teams to buy into the scheme which does not include any voting rights, and Scuderia Ferrari President Sergio Marchionne, who was speaking at an investor’s conference on Thursday, has asked for clarity from Liberty Media as to their plans after 2020.

“We have started exploring the opportunity now. We are in discussions with Liberty and I recently had a meeting with Chase [Carey, F1 CEO].

“The issue is not just the question of the financial investment. This is something that we do for a living in a very serious way. The Concorde Agreement expires in 2020.

“So, becoming a non-voting shareholder in an entity, which effectively keeps us trapped in without knowledge of what 2021 and later would look like, it is something I consider unwise.

“So one of the things we have tabled with Chase, and I think we’re not the only ones that are tabling these concerns, is clarity on what the post-2020 world looks like and what Ferrari may be able to get from its involvement in Formula 1 activities.

“Once we have clarity, then I think it becomes a lot easier to decide whether we want to participate in this venture.

“I think that there’s a huge amount of upside left in F1, which if properly managed can deliver rewards for everybody who is an investor in this business. But we need clarity and we’re not there yet.”

Another point of interest for Ferrari are the rumours suggesting Liberty will scrap Ferrari’s heritage payment, an amount in the region of $100 million that they are currently in receipt of for having competed in F1 during every season since the championships inauguration, in a bid to make the sport fairer for all.

Marchionne is unperturbed by these comments at present however, knowing that nothing can officially change until after the current contracts are up in three year’s time.

“There’s going to be no changes to the contractual agreements until 2020 with F1 and Ferrari.

“The topic has not even been brought up, and I think it will be fairly unwise to raise it as a discussion topic.”

McLaren Technology Group Executive Director, Zak Brown, insists the reluctance from teams so far is not because the deal put forward is not an acceptable one, just that it required further research before they were willing to commit to anything concrete, as the American explained to recently.

“I don’t think it was a case of this is a good deal or a bad deal, it was more we want more time to talk about it, get to know you, and understand where we’re going. Because it’s a potentially substantial investment, and we just wanted to know more and have more time to talk about this.

“Certainly it was great that they did it, because they said that they would, so they followed through with their promise, and it was great when the feedback they got was we want more time, and they reciprocated by saying they’ll give us that time.

“So they are doing all the right things to show that they are going to take a collaborative approach to their relationships with key stake holders.”

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