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Liberty Media injects $1.4 billion into Formula 1 after sale of shares
- Thierry Bakker
Liberty Media has confirmed Thursday that it will lend a helping hand to Formula 1. Some race teams have received an advance on the prize money in order to avoid financial problems. In total, the owner of the king's class of motorsport has released around 1.4 billion to ensure the survival of Formula 1 and its teams.
Last week, Liberty Media transferred a stake of 33 percent event promoter Live Nation to the satellite radio station SiriusXM, according to Forbes. This was necessary because Liberty didn't had the amount of 1.4 billion dollarrs themselves. Not only do the teams lose revenue because they do not drive, but Liberty itself as well. They don't get the hosting fees of the organizing GP's and that creates a gap in the budget of the American group.
Liberty protects ecosystem Formula 1
Liberty claims to have taken these measures to protect the sport's 'ecosystem'. This is because many Formula 1 formations are struggling with liquidity and cash flow problems. By advancing prize money, the future of all Formula 1 teams should be safeguarded. If a team were to go bankrupt in Formula 1, this would mean a lot of loss of face.
The sale of the stake in Live Nation would have had a number of complex twists, but the result is that for the time being it would provide Formula 1 with enough money to survive and that the promoters of the Grands Prix could be compensated for the loss of ticket sales if it turns out that it would have to be raced without spectators.
Liberty takes care of themselves
In addition, it ensures that Liberty can meet its loan obligations. This was also in the stomach, as Liberty ran the risk of violating the terms of a loan of 2.9 billion U.S. dollars because of the probability of the scenario that Liberty's profits will collapse this year.