When Liberty Media purchased Formula 1, they offered an investment vehicle for teams to own shares in the sport. If memory serves correctly, initially these shares were passed and the window was extended but it now seems that opportunity has closed it seems the teams weren’t interested.
I also recall reading an article many moons ago from Mr. Sylt outlining the type and conditions of the FWONK shares and, again, if memory serves correctly, these were non-voting shares so I can see, if this is the case, how the team might feel this wasn’t the best investment regardless of the ROI.
Perhaps F1 is trying to devise a way to gain from the profitability of the sport through investment as an alternative to simply hoping the prize money is there though manufacturer’s points. Either way, it is an interesting development as revealed by Autosport.
“the investment opportunity offered to Formula 1 teams to purchase up to approximately 19 million shares of Series C Formula One common stock (‘FWONK’) has expired.
“The Formula 1 teams were offered the opportunity to invest at a per share purchase price of $21.26 at the time of Liberty’s acquisition of Delta Topco Limited, the parent company of Formula 1, on January 23, 2017, and subject to a six month investment review process.”
“the approximately 19 million shares previously reserved for issuance to teams have been retired” while confirming that it “retains the right to offer future investment opportunities to Formula 1 teams.”
On the surface, that doesn’t seem like a good thing but if I were a team and the option to buy non-voting shares in a paper company without actual assets and a voting opportunity, I may come to the same conclusion as the teams. Regardless, F1 boss Chase Carey says things are going great even if the teams chose not to invest.
“We have been actively engaged with all teams to shape a shared vision for the sport that will create real value for all stakeholders,” he said.
“While the window for this particular investment opportunity has passed, we are pleased with the collaborative discussions we are having with the teams.
“These discussions will take time, but we appreciate their receptivity towards further aligning our incentives for the long-term benefit of the sport.”
Perhaps the new investment window might find a new kind of stock?
Hat Tip: Autosport
Prelude to a impending showdown between Liberty Media and the teams and it can only get better.
I get that Merc and Ferrari want more bang for their buck, but what about a team like Sauber or possibly Force India? They wouldn’t get votes, but they could at least make money. I’m not a business analyst, so your insights are welcome.
I’d buy one share just to get the annual report.
It seems like Liberty would reap the biggest benefit as purchasing stock in F1 would effectively marry that team to F1 through joint venture. Ferrari will most likely never leave but all of the others may want to retain some flexibility in their future as profit margins change. If Liberty starts fiddling with payout distributions things will get interesting. Being locked in and then getting screwed was probably not a gamble the teams wanted to make as their leverage would be greatly reduced as share holders in F1.