A twenty-billion-dollar takeover bid (£16bn) by Saudi Arabia to buy Formula One was rejected by the sport’s current owners, Liberty Media. The American firm had bought F1 in 2017 for less than a quarter of the amount Saudi Arabia was willing to pay, £3.3 billion pounds ($4.1bn). Nevertheless, talks between the wealthy Gulf State and Liberty Media are said to have broken down.
According to the Telegraph, which reported the details of the failed takeover bid, insiders close to both sides said that meetings had taken place in recent years, but not in recent months. Citing Bloomberg, the UK news agency said that Saudi Arabia’s Public Investment Fund was ready to spend £16 billion ($19.7 bn) – a huge uplift on Liberty’s £3.3bn deal in 2017.
FIA President, Mohammed Ben Sulayem, has expressed concern about the high prices being offered by the Saudis. “As the custodians of motorsport, the FIA, as a non-profit organisation, is cautious about alleged inflated price tags of $20bn being put on F1,” Sulayem said on twitter.
As the custodians of motorsport, the FIA, as a non-profit organisation, is cautious about alleged inflated price tags of $20bn being put on F1. (1/3)
— Mohammed Ben Sulayem (@Ben_Sulayem) January 23, 2023
“Any potential buyer is advised to apply common sense, consider the greater good of the sport and come with a clear, sustainable plan – not just a lot of money,” Sulayem added in his comments objecting to the Saudi bid. “It is our duty to consider what the future impact will be for promoters in terms of increased hosting fees and other commercial costs, and any adverse impact that it could have on fans”.
In a separate interview the FIA President suggested the price is “inflated”. “It’s exaggerated,” he added. “Talking with common sense, is it worth that much?” Concern expressed by Sulayem reflects growing anxieties around the corrupting impact of colossal sums of money being pumped into sports. Though the problem has existed for many years, the infinite resource of the Gulf States being used to buy up major sporting brands has caused even greater fear over the sustainability.
Though arriving late in the business, following in the footsteps of its neighbours UAE and Qatar, Saudi Arabia has the potential to reshape the sporting landscapes. The Kingdom is desperate to boost its image and sees sports as a way to not only do that through “sportwashing”, but also in preparing for a post-oil economy.