A couple of days ago, rumours dropped that the Saudi Arabian Public Investment Firm were interested in buying Formula 1. The petro-state had made a bid north of $20 Billion last year to F1’s current owners Liberty Media.
However, FIA President Mohammed Ben Sulayem has shut down rumours of F1 going up for sale anytime soon. He has not denied or accepted the PIF’s bid for buying the sport.
Instead, Ben Sualyem believes acquiring the sport will require more than “just a lot of money.” And any discussions on buying F1 won’t be entertained without the knowledge of the FIA.
Mohammed Ben Sulayem responds to rumours on F1’s sale
Mohammed Ben Sulayem tweeted as a response to the viral story by Bloomberg regarding the Saudi takeover of the sport. According to the story, F1 had received a bid from the Kingdom’s Public Investment Firm.
The price was set to $20 Billion. The deal fell through after Liberty Media rejected the bid. But Saudi officials have kept the offer open for negotiations.
Liberty purchased the sport in 2017 for $4.5 Billion. But since their takeover, Formula 1 has entered a new dimension of commercial success.
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. (3/3)
— Mohammed Ben Sulayem (@Ben_Sulayem) January 23, 2023
F1’s massive boom in popularity, especially amongst the younger generation has made it one of the world’s most valuable sports. And with the boom in new markets like the USA and Asia, the revenue of the sport is at an all-time high.
Ben Sulayem did not name the report, nor the names of any bidders. But he insists that any potential bids will be analysed for the added value they bring to the sport and not just the money.
Also Read: Andretti-Cadillac have to reportedly pay $500-$600 million to enter F1 in 2026
Why Saudi Arabia wants to buy F1
Saudi Arabia is an oil-rich middle eastern country that has long enjoyed the wealth generated from its fossil fuel resources. And to diversify its riches, the country has used its sovereign wealth fund to invest in new assets and to create new revenue-generating streams.
The Public Investment Fund is the largest sovereign wealth fund in the world with estimated assets worth $620 Billion. This includes stakes in Fortune 500 companies like Facebook, Uber, Disney, and Boeing and banks like Citigroup and Bank of America.
The fund has also invested in sporting ventures. Including buying an English Premier League club Newcastle United F.C. for $410 Million in 2020. And the establishment of the LIV Golf Tour.
Saudi Arabia’s sovereign wealth fund tried to buy Formula 1 for “well over $20 billion” last year, according to @business.
That’s 2.5x the $8 billion enterprise value that Liberty Media purchased F1 for in 2016.
And while I’m glad Liberty said no, Saudi Arabia isn’t going away. pic.twitter.com/QpkyRpIHL2
— Joe Pompliano (@JoePompliano) January 20, 2023
Saudis are also reportedly in talks to buy WWE. Inevitably, Formula 1 became the next target for the country which see terrific potential in the sport.
Formula 1 has become one of the fastest-growing sports in the past few years and has attracted viewership from across the world. F1’s success, commercial value and younger fanbase across the world have made it a lucrative Target for the Kingdom.
Acquiring sports leagues or teams also aids the country in ‘Sports Washing.’ This way the country can improve the stained reputation it has gained for human rights abuses.
F1 has not gone under the hammer yet, but they still depend a lot on the nation. Saudi Aramco is a major sponsor for F1 and the country also hosts a Grand Prix since 2021.
Saudi Arabia has also invested in teams like McLaren and Aston Martin. So it’s safe to assume that the PIF officials will be closely monitoring the situation and won’t hesitate to bring another offer to the table.
Also Read: After Liberty Media Snubs $20 Billion Offer On Formula 1 Saudi Arabian Fund To Go For WWE
