Zak Brown: Why Liberty Media is the buyer that F1 needed
Sponsorship and marketing guru Zak Brown believes that incoming Formula 1 owner Liberty Media’s desire to make the sport better, rather than simply milk it for profit, can only be good news for fans.
In the wake of Liberty Media’s announcement that it will purchase Formula 1 by the first quarter of 2017, in a deal worth $8billion in total, Brown said that the “strategic” nature of the new owners – as opposed to CVC’s purely money-driven approach – should spell a brighter future.
“Liberty Media is one of the best strategic buyers you could have,” said Brown, who is chief executive of CSM Sports & Entertainment and founder of Just Marketing International.
“This means they take a very long-range view of the sport, as opposed to a private equity group like CVC, who did what they were supposed to do, which was hold the property for seven to 10 years and provide a fantastic return for themselves and their shareholders.
“However, a strategic buyer might be a little more focused on the strategic growth and, ultimately, to have a massive concentration on the fans. And as long as you have lots of happy fans, young fans, more fans – everything else slots into place. Teams are happy, so are sponsors and TV.
“So I think we’re going to see big focus on the fanbase, which will then make the balance of the sport very healthy. The healthier the sport, the healthier the teams.
“If the sport is better, it’s easier to find sponsors, and then the more sponsors are willing to pay. It’s going to be good for everybody.”
Helping the smaller teams to thrive
One of Brown’s main gripes with the way F1 has been run in recent years is the way the smaller teams have been treated financially compared to the grandee outfits at the front of the field.
“Contracts with the teams are signed to 2020, but there’s no doubt that the ecosystem of Formula 1, even beyond the teams, isn’t as balanced as it needs to be,” said Brown. “I think in any business, the whole ecosystem needs to be healthy for it to be really sustainable.
“I think there will be new agreements in place for 2021 and I think Liberty will take a view on what’s healthiest for the sport. We would all agree having healthy race teams are better than having ones that are dollars in debt.
“I’m not suggesting franchising, but if you look at most franchised sports teams around the world, the LA Clippers sold for $2billion [in 2014] for example, they are appreciating in value.
“The back end of the Formula 1 grid has not appreciated in value. And that needs to be addressed. And I think they will – but how they will, only time will tell.”
FIA responds to Liberty Media's acquisition of F1
"F1 is like a barber that offers just one hairstyle": Three F1 priorities for Liberty