Yahoo Autos What Does Liberty Media's Entry Into F1 Mean for U.S. Fans?
Veteran Formula 1 broadcaster Bob Varsha is blessed with an amazing intellect and a trapdoor memory. Given the breadth of his association with F1 from decades of calling grand prix races, it makes his views on the U.S.-based Liberty Media group, and its recent acquisition of a significant percentage of the series' commercial rights, more interesting than most.
Whether it's a personal crutch, or simply my appreciation for his measured views, looking to Bob for spin-free perspectives on F1 has been a steady habit since we worked together at SPEED. As someone who has charted all of F1's minutia since Senna won his first world championship, spanned all seven of Schumacher's seven titles, and welcomed Lewis Hamilton to the sport, he's uniquely positioned to opine on the latest transaction involving Liberty.
"Bernie Ecclestone has rebought and resold the rights to Formula 1 many times over," the lawyer-turned-commentator told RoadandTrack.com. "It is a big resource for him, has built his fortune. I think this is another episode of the same story. Other than the fact that Liberty Media is an American company, I don't think this event is unusual."
American F1 fans have every reason to hope the introduction of the Liberty Media team will raise the series' profile in a country that tends to ignore sports that aren't named NASCAR, or don't involve sticks and balls. Some F1 team principals have expressed their hope that Liberty will bring more attention to the series across the globe through its media empire. And Varsha hopes both sides realize the basic reason why Liberty made the purchase.
"We need to keep in mind that what we are dealing with here, it is not Formula 1 per se but the commercial rights to Formula 1 that they have bought into," he added. "The FIA still owns the series and they have the final say of things but this is the big money maker. This is what investing companies do."
F1's viewership number have been on a decline in many global markets, it's appeal has diminished to some degree with reduced speeds and sounds, and in a general sense, it's safe to say the series-long hailed as a runaway success-has looked surprisingly mortal in recent years.
Granted, it's still a raging success compared to every other form of motor racing, but with its first real loss of luster, could Liberty Media Group CEO John Malone, and the wide network of television and social media outlets at his disposal, step in the restore the beloved series to its former status?
"I will be surprised if this is anything more than an investment by Liberty Media," Varsha said. "Before them, CVC Capital Partners invested about $2 billion in Formula 1 a decade ago, and since then, they have taken many, many times that money in return. I suspect that is exactly what Mr. Malone and Company are doing here; they see it as a tremendous investment opportunity. Money at this level is invested to make great returns."
Atlanta-based Varsha has seen a local example of how a Liberty-owned sports property has fared since it was purchased by Malone and hopes F1-at least on the commercial side–is spared the same outcome.
"I think we have to remember that Liberty Media is already in the sports business, they own the Atlanta Braves, one of the worst teams in baseball," he said. "That organization has gone on an austerity program and sold off most of their best talent, and now here they are, they have been in the cellar and the National League East for all this time while they supposedly have a plan to build up a new team.
"From that example, and to restate something I said a moment ago, I don't think artistic success is what they're after as much as a product that returns a big profit. They certainly will have a look at anything that they think can, they can leverage into profits. That is not a bad thing, necessarily, but it also has very little to do with enriching the organization they've purchased or, in the case of Formula 1, bought into with a stake of the commercial rights. I hate to throw a wet blanket on the thing but I don't expect a lot to change."
DANCING WITH THE MAYOR
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