Media magnate and Liberty Media (LLYVK) chair John Malone sees more upside in Formula One since his purchase eight years ago.
“I think the shareholders seem to love it right at the moment,” he told Yahoo Finance Executive Editor Brian Sozzi during an episode of the Opening Bid Unfiltered podcast (see the video above or listen below.) “It’s really performing well.”
The veteran dealmaker — who also owned MotoGP — didn’t shut down a potential sale of F1 if the right offer comes to pass.
“It has an exceptionally good economic structure,” he said. “It will be a very large free cash flow generator, and there perhaps will be incremental, synergistic add-ons. It still has a big brand to drive.”
“Look, it’s a public company,” he continued. “If somebody gets carried away, and they want to buy it, and they’re willing to pay more for it than the board thinks that they can deliver to the shareholders, then we would sell it. I mean, that’s the bottom line.”
Malone has proven he’s not one to shy away from driving an asset with untapped potential.
Formula One’s history dates back to the 1950s and was primarily enjoyed by European spectators for much of its life. In 2017, Liberty Media acquired the rights to the commercial side of the sport for $301 million and set out to bring it to an audience closer to home.
Liberty Media introduced Formula One racing to a US-based audience through races in Miami and Las Vegas and branched it out to living rooms and smart devices courtesy of F1 TV and direct-to-consumer streaming options.
The 2019 Netflix (NFLX) documentary “Formula 1: Drive to Survive” also cemented its cult popularity on this side of the Atlantic, growing viewership from a reported 490 million TV viewers in 2018 to 1.6 billion cumulative viewers in 2024. That same year, 6.5 million fans attended races, giving Formula 1 a record-breaking year for attendance.
The average team valuation stood at a reported $2.31 billion as of last year. Valuations likely have gotten a boost this year amid the runway hit in Apple’s (AAPL) F1 movie starring Brad Pitt. Apple is now reportedly hunting to land F1 TV rights.
Malone founded Liberty Media in 1991 as a spin-off from Tele-Communications, Inc., a cable company he sold to AT&T (T) for $50 billion. He went on to hold stakes in companies such as Live Nation (LYV), SiriusXM (SIRI), and QVC (QVCGA).
JPMorgan’s David Karnovsky and team reiterated an Overweight rating on Liberty Media and raised the price target to $120 from $108 in a late August note. Karnovsky is particularly bullish on the potential for a large TV rights deal for F1, which has been speculated to be north of $150 million.
