In online stock trading you will need to look out for new entities being represented at the stock exchanges. Some of them may be insignificant but others are too conspicuous to be ignored.

The highest form of motor racing will soon be represented at Nasdaq. In fact, it is a global mass media group that has incorporated the sport into its wide range of interests.

The Deal

On Wednesday, the 7th of September 2016, the most prestigious championship in motor racing, the Formula One World Championship (“F1” or “Formula 1”) agreed to be taken over by the American Liberty Media Corporation ($LMCA) headed by John Malone. Liberty will be purchasing the Formula One Group, the sport’s parent organization, for US $4.4 billion from current owner CVC Capital Partners headed by 85-year old Bernie Ecclestone. The takeover would value F1 at US $8 billion.

The deal is subject to the fulfilment of certain conditions till which CVC will continue to remain as Formula One’s controlling shareholder. On approval by the international governing body for the sport of motor racing - the FIA, competition law and antitrust authorities and stockholders of Liberty Media, and on completion of the deal by 2017 Q1, Liberty Media Corporation with be renamed the Formula One Group and will change its ticker symbol from $LMCA to $FWON to list on the Nasdaq. The $4.4 billion amounts to a stake of 18.7% while the remainder will be acquired as the deal is completed in 2017.

Chase Carey, media giant 21st Century Fox’s executive vice president, will be the new chairman of Formula One Group with Bernie Ecclestone continuing as CEO.

Brighter Future for the Formula One Group

There is no doubt among fans and sports analysts that the deal can only be great for F1, which has been run till now in a semi-autocratic manner with the sport broadcasts tightly held in TV contracts. This arrangement has particularly been annoying for younger audiences who wish the race broadcasts to be made available in YouTube and other media channels. This is gradually changing though, and the acquisition by a global media empire is expected to make the race programming more accessible to audiences around the world.

Ticket prices at race hosting venues have also been exorbitant because of Ecclestone charging racetracks with hefty fees for hosting the races. This could change too, since a rise in the number of fans is essential for the deal to reap success for $LMCA. And with another globally popular entertainment interest added to $LMCA’s exhaustive arsenal, there is no doubting the benefit this deal and new identity would bring to the media group.

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