Formula 1: Is Liberty Media the Right Owner? May 25, 2017 by Rick (Driver Weekly)
To paraphrase, “change is constant, but some changes are clearly better than others.” However, in the case of Liberty Media’s acquisition of the Formula One World Championship, and the ultimate retirement of Bernie Ecclestone as an active stakeholder in the series’ future, this sentiment would seem to be a particularly accurate parting shot. Ecclestone could no longer outrun the effect of his own ‘legend’ after he made too many new and more powerful enemies by balling up nearly every reasonable business deal during the preceding 20 years.
In an industry that’s focused on globalized entertainment, Bernie could never seem to figure out a way to avoid screwing international partners, walking away, and leaving the pieces for hordes of lawyers that preyed on the walking wounded. It’s true that CVC, the previous major owner, did manage to make a buck along the way; according to revenue metrics, the Championship was still generating year-over-year cash churns averaging $1.9 billion before Liberty’s tender offer. However, while that may sound like a lot of money when it comes to a historic yet still cutting-edge attraction that mates high-technology with nationalistic fervor and blood-sport levels of competition, there was still a lot of money being left on the table. Ecclestone didn’t effectively realize the whole 21st-century vision for a globalized automotive entertainment opportunity moving forward. Enter Liberty Media’s Formula One Group and its CEO, and now chairman, former Fox executive Chase Carey.
Liberty Media and Chase Carey
Carey is both a visionary and a seasoned business operator who sees the current World Championship as an ambitious starting point. “I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world," he said in 2016 during his first step toward total ownership of the series, "I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike."
Liberty has achieved 100% ownership of Formula One, and Ecclestone is finally gone; to date, not only have Carey and his commercial team registered their satisfaction with the deal, various manufacturers, teams, and sponsors seem to be equally pleased with championship’s new direction. “The right thing to do before making any decisions is to sound out the fans, to hear what they have to say,” said Ross Brawn, F1’s new managing partner for sport, “[but] there will be a change of course. With Carey as CEO, me on the sporting side, and Sean Bratches on the commercial side, the decisions will be collegiate. And we will involve the FIA and the promoters. In recent years I have seen F1 being slow to react. It’s clear to everyone we need a change, but we have to pay attention to preserve the essence of Grand Prix. … Moving too quickly could be counterproductive. We need to study, and understand what solutions will make the sport more exciting and more competitive. We need to be careful not to do things, as has happened in recent years, that artificially to create spectacle. But I agree we need to make F1 more competitive,” he added.
Brawn’s thinking was further supported by F1’s new commercial leader, Sean Bratches. During a recent CNN interview, Bratches empathized that he is going to focus on four real things: polishing the F1 brand, expanding the competition’s digital offerings and fan engagement, a more democratic approach with partners, and creating a better race experience. Bratches is confident that their understanding of the brand will allow them to enter new marketplaces with a stronger and more engaging race: “Creating a better race experience that engages fans, spectators there and on television is a huge opportunity.”
Now, having followed the first three races in the 2017 Championship, it appears that everyone involved is engaged and eager under Liberty Media. The races are much more interesting and compelling, particularly given new rules packages that have enabled greater speeds, more direct competition, and much more compelling entertainment. So, all in all, things seem to be looking up. It’ll be interesting to see what happens down the road as Liberty Media rolls out a new three-to-five year plan and digital strategy while maintaining their “honeymoon” status with partners, drivers, and sponsors.