A reallocation of assets by Liberty Media has handed F1 a massive $1.4 billion lifeline that will help the sport and its teams navigate the current economic downturn.
The reallocation announced on Thursday by Liberty re-attributed the holding’s stake in Live Nation Entertainment from the Formula One Group to its SiriusXM tracking stock, with $1.5 billion in net asset value moving from each entity to the other.
The change has considerably reduced Formula 1’s debt while also providing it with a cash injection of $1.4 billion that, according to Liberty, “strengthens FWON [Holdco] balance sheet, provides potential liquidity for F1 in event of continued delay of season, including preserving health of ecosystem” and “reduces potential exposure to live events.”
Formula 1 has ‘advanced money’ to certain teams – Maffei
In a call with Wall Street analysts, Liberty Media CEO Greg Maffei said the asset exchange between Liberty’s two entities was the best way of injecting fresh liquidity into Formula 1.
“We looked at a range of opportunities to see how F1 could secure incremental liquidity, Including potentially selling a stake to others, including raising capital in other formats. And we believed this was the most efficient,” explained Maffei.