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News recently emerged that Formula 1 nearly had a new owner, and — surprise! — it was Saudi Arabia who tried to buy the series.
As it stands, Formula 1 is owned by Liberty Media, which also has ownership stakes in SiriusXM satellite radio and the Atlanta braves. Liberty bought the series in 2016 for $4.4 billion.
According to Bloomberg, Liberty Media turned down a £16 billion (just shy of $20 billion) offer from Saudi Arabia’s Public Investment Fund. The PIF owns stakes in numerous high-profile companies and also bankrolls LIV Golf and owns a controlling stake in Premier League side Newcastle United.
While the Saudis kicked the tires (or tyres, depending on where you live) on becoming F1’s new owners, Liberty Media was unwilling to sell.
Saudi Arabian money is nothing new. The past two seasons have seen Grand Prix in Saudia Arabia on the high-speed Jeddah Corniche Circuit. In fact, The Guardian reports that the Saudis cut a $650 million/10-year deal to host a Formula 1 Grand Prix.
Just a few weeks ago, the Saudis were rumored to be closing in on a deal to buy the WWE through the PIF. That has yet to pan out.
FIA President Voices Concerns Over High Value
A nearly $16 billion ROI for Liberty Media in just 6 years sounds like it would’ve been pretty sweet. There’s no questioning that for them, it would be.
However, FIA president Mohammed Ben Sulayem has some concerns about the rapid increase in Formula 1’s value.
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. (3/3)— Mohammed Ben Sulayem (@Ben_Sulayem) January 23, 2023
Suleyem’s concern is that a possible buyer would try to recoup their money in a hurry. Doing this could lead to a domino effect that increases the cost of hosting fees. Of course, that would likely lead to an increase in ticket prices, which would keep a lot of fans most fans from catching a race.
If you’ve looked at Formula 1 tickets recently, the idea of prices going any higher will make your wallet hurt.
Ben Sulayem has been a controversial figure at times, but I think he hit the nail on the head here.
However, don’t expect this to be the end of PIF involvement in F1. It’s believed that the Saudis are interested in luring a team to operate out of the country. Sports Illustrated’s FanNation reports that McLaren is a possible target as they have already struck deals with the team’s Formula E and Extreme E operations.
Follow on Twitter: @Matt_Reigle