The Federation Internationale de l’Automobile unanimously approved the sale of Formula One to Liberty Media at a World Motor Sport Council meeting today, reports Racer. Why wouldn’t they approve it? As a shareholder in Formula One Group holding company Delta Topco, the sale gives the FIA a nice paycheck.
The FIA, which serves as the governing body over F1, received its one percent stake in Delta Topco in 2013 under the agreement that it could only be monetized when F1 is sold, according to The Economist. Naturally, the fact that the FIA has to approve the sale of F1—and thus, whether it’d like to get money from their shares—has some worried about a possible conflict of interest.
A 2001 agreement following an anti-trust probe into the FIA’s dealings limited the governing body’s functions so as to avoid commercial interest in its own series. The Economist explains:
The stake appears to breach an agreement with Brussels that was struck in 2001 when the European Commission closed a two-year antitrust probe into F1. In return for the file being closed, the FIA, whose grand headquarters are on Paris’s Place de la Concorde, undertook to “modify its rules to bring them into line with EU law”. These changes included limiting its role to that of a regulator, “with no commercial conflicts of interest”. To prevent such conflicts, the FIA sold all its rights in the Formula One World Championship.
Well, that’s clearly fallen by the wayside. Opponents of the FIA holding a profitable stake in F1 point to the fact that the FIA governs multiple series, and a commercial interest in one series may lead to the FIA favoring it over others. (Insert theories about last year’s F1 race booked right over the end of the 24 Hours of Le Mans here.)
When ex-FIA president Max Mosley questioned the FIA’s one percent stake, the FIA argued that it was too small to be material, Mosley told The Economist.
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Liberty Media is purchasing 100 percent of the shares in Delta Topco for $8 billion, so we’ll see if that excuse holds up when the FIA’s check comes in the mail. Per The Economist, the FIA’s stake was worth $72 million when they paid only $458,197 for it in 2013. That’s a significant profit!
Of course, Liberty Media hasn’t done anything to suggest they aren’t a reputable buyer, and everything else seems to be above-board with the sale. Several national authorities have reviewed the sale with no issue, however, it fell below the European Union’s merger review thresholds. Liberty Media refused to comment to The Economist, however, both Formula One and the FIA denied any impropriety.
In addition to figuring out a successor for longtime series head/king troll Bernie Ecclestone, Liberty Media hopes to improve F1's presence online, sell naming rights to each race and make each race on the calendar feel as big as the Super Bowl.