Since Liberty Media appeared on the F1 scene the American company has been hailed by many as the saviour of the sport. Forecasts have stretched from Liberty boosting F1's social media presence and live streaming of races to keeping classic circuits alive. However, looking into the detail reveals a rather different picture.
In fact Liberty has a sixth as much cash in the bank as F1 itself and, as Pitpass has reported, it is borrowing to fund the takeover.
That's not all.
It has now come to light in an article for Forbes by Christian Sylt that Liberty has even asked the teams for money so it can pay more cash to current F1 owner CVC. That's not what you expect from a white knight, especially one whose majority owner, John Malone, is worth an estimated £5.6 billion.
It is no secret that Liberty has offered shares in F1 to the teams. This became public soon after Liberty announced its takeover of F1 but what wasn't public was where the proceeds would go. It is now.
According to Forbes, three shares in F1's parent company Delta Topco have been designated as team shares and F1's new chairman Chase Carey says that "some of the teams have expressed an interest in investing." They are likely to be the biggest outfits and there is good reason for this.
Speaking on Thursday at a Liberty investor meeting Liberty's boss Greg Maffei said "we obviously also went to meet with the teams and I think as has been mentioned we have expectations that they will become owners in Formula One primarily through the placement of some of the shares to the CVC Group to them. They're excited about some of the things that Liberty and Chase can do for the sport."
So what does he mean? The first point to make is that although Liberty agreed to pay £3.5 billion for F1 it isn't paying for it all in cash. In fact, cash represents just 25% of the amount that Liberty has offered. The rest of its payment comes in the form of shares in Liberty itself.
The thinking is that the shares have a value and can be cashed in so they are equivalent to money even though the company doesn't have it in the bank. That's fine but in these uncertain times it wouldn't be unreasonable to prefer money in your pocket rather than shares which could go down as much as they could go up. CVC seems to agree as Forbes reports that it wanted the cash to come to £1.6 billion rather than the £875 million that Liberty is offering.
According to Forbes, in a last-minute twist, just a few days before the sale was announced Liberty agreed to increase the cash component of the deal by £80 million. CVC is still looking for more money so Liberty has come up with a solution. Liberty is trying to sell stakes in F1 to the teams so that it can pass the cash proceeds to CVC and reduce the number of shares that it gets.
You might ask 'Why can't Liberty just pay CVC more cash?' Well, with just £83 million in cash in the bank, compared to the £498 million held by F1 itself, Liberty isn't exactly overflowing with funds. Given that several of the teams are understood to be in financial trouble it seems staggering that Liberty's first move hasn't been to give the teams shares for free but to ask them for money so that it can pay CVC.