Netflix executives must eat to get their hands on the latest scandal in Formula 1. This conflict does not revolve around the title battle between Lewis Hamilton and Max Verstappen; nor does it focus on the fierce competition for a place that has, for example, seen Daniel Ricciardo step off the grid in his new role as Red Bull’s third driver. In fact, the last noise is not even in season, but in winter, with no engine running. This is a purely political battle between Liberty Media, which owns the commercial rights to F1 through the Formula One Group, and the Fédération Internationale de l’Automobile (FIA). At stake is running a business that has gone from idling to turbocharged in just three years and whose value has skyrocketed accordingly.
The fuse was lit last Monday by FIA president Mohamed Ben Sulayem, who expressed his concern for Bloomberg report citing a $20 billion offer by Saudi Arabia’s Public Investment Fund (PIF) to take control of Formula One Group, which was rejected by Liberty. Saudi Arabia’s bid to land a juicy global prize like F1 comes after several years of an aggressive propaganda policy by Riyadh to bid to host major sporting events in a public image campaign aimed at using the exposure they provide to present softer image. The Spanish and Italian football federations have staged Super Cup matches in the Saudi capital in recent years, and the Dakar Rally moved from South America to the Arabian deserts in 2020, while Formula 1 added the Jeddah circuit to its calendar in 2021, a year in which also the completion of PIF’s acquisition of Premier League club Newcastle United.
As the guardians of motorsport, the FIA, a not-for-profit organisation, is wary of the alleged inflated $20 billion price tags being placed on F1. (1/3)
— Mohammed Ben Sulayem (@Ben_Sulayem) January 23, 2023
Few sports have grown in popularity the way F1 has since Liberty Media bought it in 2017 from private equity firm CVC Capital Partners in a $4.6 billion deal. Since then, the Grand Prix has become universal through several factors: the visibility provided by the Netflix series; Drive to survive; consolidation of the all-important US market, where up to three events will be organized in 2023 (Austin, Miami and Las Vegas); and F1’s new explosiveness on the track, particularly through the revival of Red Bull, whose reigning world champion Max Verstappen has emerged as the perfect actor to play Lewis Hamilton’s antagonist to create a rivalry worthy of the sport’s golden era. However, the PIF offer represents a huge increase over the acquisition value and such a difference in just six years of Liberty Media ownership is what prompted the FIA boss to appear on the scene.
“As guardians of motorsport, the FIA, as a not-for-profit organization, is wary of the alleged inflated $20 billion price tags being placed on F1,” Ben Sulayem wrote on Twitter. “Any potential buyer is advised to exercise common sense, consider the best of the sport and come with a clear, sustainable plan – not just a lot of money. It is our duty to consider what the future impact will be on promoters in terms of increased hosting fees and other commercial costs, as well as any adverse impact this may have on fans.”
In response, last Tuesday Liberty Media issued a strongly worded letter from its legal department suggesting that Ben Sulayem had overstepped his authority in a matter that was neither his responsibility nor that of the organization he chairs. “Formula 1 has the exclusive right to use the commercial rights in the FIA Formula 1 World Championship under a 100-year contract,” the letter said. “Furthermore, the FIA has given unequivocal undertakings that it will do nothing to prejudice the ownership, management and/or exercise of these rights. We believe that these comments made by the FIA President’s official social media account violate these rights in an unacceptable manner.
With the grid currently at a standstill, the excellent health of F1 at a sporting level has failed to mask the wound that is opening between the FIA, Liberty and the teams. Decades of rapprochement after the feud that marked the World Cup agenda in the 1980s appear to have been abandoned. With no allies to publicly express their support, and with few candidates to take his place, Ben Sulayem’s position is beginning to look less stable. Just this week, a British Liberal MP called him to order, accusing him of being careless for ignoring a letter signed by 90 MPs sent to him 10 months ago highlighting the consequences of taking F1 to countries where human rights are not respected. observe
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