Sky, Other Bidders Circle Formula One -- WSJ
July 30 2016 - 3:02AM
Dow Jones News
By Dana Mattioli and Dana Cimilluca
The long-awaited sale of the Formula One may finally be nearing
the finish line.
A number of bidders including British broadcaster Sky PLC are
circling Formula One and a winner of the auction could emerge in
the next few weeks, according to people familiar with the matter. A
deal could value the racing series at around $8 billion or
more.
Other possible buyers participating in the process include a
team of Discovery Communications Inc. and John Malone's Liberty
Global PLC, the people said.
Should there be a deal, it isn't clear how much of the famed
motor-racing company would be sold.
Formula One holds the eponymous races in cities around the
world, from Monte Carlo to Kuala Lumpur. The auto-racing franchise
markets lucrative television rights and sponsorships for the
popular races and negotiates contracts with venues and teams, among
other functions. In 2006, private-equity firm CVC Capital Partners
bought majority control of Formula One. It has since reduced its
stake to around 35%.
CVC has flirted with the possibility of selling its stake for
years but for various reasons hasn't struck a deal.
One complication was a trial Formula One's colorful founder
Bernie Ecclestone faced in Germany related to charges of bribery
and fraud. A court in 2014 dropped the case against Mr. Ecclestone,
who is known as "Supremo" in Formula One circles, in return for a
payment of $100 million.
Mr. Ecclestone is a former used-car salesman who built the race
into a powerful marketing force in the late 1970s. The octogenarian
remains chief executive of the company. Today, the stars in the
sport include Lewis Hamilton and Sebastian Vettel.
Rights to show popular sporting events are considered
increasingly valuable for channel distributors and advertisers amid
a rise in ad-skipping technology and web-based entertainment.
Sky has a vast pay-TV business, with more than 20 million
customers in Italy, Germany, Austria, the U.K. and Ireland. It is a
big investor in television content too, with a programming budget
of more than GBP4.6 billion ($6.1 billion), according to the
company's website. Its market value currently stands at nearly
GBP16 billion.
21st Century Fox Inc., which holds a 39% stake in Sky, shares
common ownership with News Corp, the owner of The Wall Street
Journal.
Discovery, whose properties include Discovery Channel, TLC and
Animal Planet, has been trying to build its sports-content holdings
abroad, buying control of European sports entertainment group
Eurosport International in 2014.
Liberty Global is a global media and content-distribution giant.
It has struck a number of content deals in recent years, including
one for the U.K.'s All3Media, together with Discovery.
Mr. Malone, Liberty Global's chairman, has a big stake in
Discovery Communications.
Amol Sharma and Craig Karmin contributed to this article.
Write to Dana Mattioli at dana.mattioli@wsj.com and Dana
Cimilluca at dana.cimilluca@wsj.com
(END) Dow Jones Newswires
July 30, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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