The new Formula One season offers some reason for optimism. When the green lights flash for the opening race in Melbourne at the end of March, we will get our first glimpse of the new promised “Super Bowl-style” Grand Prix. If its recent history is any guide, Liberty Media, the group which now owns F1, should have the ability, experience and resources to revitalise the sport, and deliver on promises they’ve made.
John Malone’s Liberty is a vast media conglomerate, and a rival of Rupert Murdoch’s News Corp. Both, at various times, have eyed each other’s share holdings. Liberty controls big name brands such as Virgin Media and the shopping channel QVC. It is anticipated that the organisation’s media pedigree will be used to recruit younger Formula One fans, and attempt to keep a tight hold of them through improved interaction.
For an idea of how this might go, we can look at Liberty’s ownership of the Atlanta Braves Major League Baseball (MLB) team in the US. The former World Series Champions were bought a decade ago from Time Warner in what was described rather unromantically as a “tax driven transaction”. Since then, performance on the field has not lived up to expectations. Two years ago, attendance slumped to the lowest level in 25 years, which affected revenue badly. Not good signs for Formula One you might say.
However, many of the problems for the Braves were caused by essential renovations of their home ground, Turner Field. This had been the 1996 Centennial Olympic Stadium and was in need of substantial upgrading to improve the experience for fans. There was no solution that didn’t involve a significant outlay.
What Atlanta is getting is a new stadium complex – Sun Trust Park, which opens in April and involves a deal to bring in Comcast’s high-speed voice and video services. An agreement like this could have potential in F1 where Liberty has suggested both virtual reality and gambling opportunities might be developed.
For the Atlanta Braves, the prospect of this new venue bolstered confidence and led to a sharp increase in the value of the MLB franchise. There is fresh optimism around results on the field too if forecasts are right about the good young players that Liberty has assembled.
Sun Trust Park is not just a sports stadium, and as such, it doesn’t have to rely entirely on MLB games for revenue. It includes a shopping mall which will have up to a million square feet of retail space, as well as a hotel and sponsorship involvement from other local blue chip companies including Coca-Cola and Delta Airlines. The prospect of year-round entertainment is a message for many Formula One tracks: investment in infrastructure could pay off.
Liberty are well placed to advise. Another Liberty company, Live Nation Entertainment, is a partner in Sun Trust Park, and describes itself as the largest live entertainment company in the world. Billy Joel will headline the first concert at the sports stadium, opening a schedule that is expected to see 40 music and comedy shows each year.
Brains and Brawn
The Liberty team has some strong leadership in place, but they haven’t played it flawlessly so far. CEO of the parent group Liberty Media Corporation is Greg Maffei, who also acts as Live Nation’s chairman. Maffei is a former Microsoft chief financial officer (CFO) and was once chairman and CFO of technology group Oracle. He described Liberty as “happy owners” of The Atlanta Braves but came in for criticism from loyal fans when he referred to the team as an “asset” and wouldn’t give a long term commitment.
Liberty’s Formula One Group, however, is being led by Chase Carey – a former executive vice-chairman at 21st Century Fox. He claimed to be “awed” when he visited the 2016 Monaco Grand Prix and was impressed that the race managed to captivate the whole city. He drew that comparison with the Super Bowl.
But the really crucial part of the leadership team must be Ross Brawn. He was hired by Liberty to act as managing director for motor sports and called the Formula One deal an “almost unprecedented opportunity to work together with the teams and promoters for a better F1.”
There is little that Brawn doesn’t know about Formula One having delivered no less than 20 world titles. He has worked with Williams, Benetton and Ferrari, notably with Michael Schumacher. In 2009 he won one title with his own team’s Brawn GP Formula One car driven by Jenson Button. And Brawn has many educated opinions about the competitiveness of the racing and the show expected by spectators.
These were no doubt expressed during his time as a consultant to Liberty before the company purchased Formula One. Brawn also introduced Virgin Media to Formula One in 2009, a company now absorbed in to Liberty. He too knows the media ropes and the expectations of such sponsors.
Brawn’s involvement, alongside the long-term game played with the Atlanta Braves, offers every indication that Liberty has the potential to improve Formula One for all concerned – and to do so not just with an accountant’s eye, but with some understanding of the glorious romance attached to this global sport.