Mohammed Ben Sulayem’s social media remarks which he made on Monday regarding the valuation of Formula 1 have reportedly not gone down well with the sport’s chiefs, Liberty Media.
A report in Bloomberg claimed that Saudi Arabia, through its sovereign wealth fund, the Public Investment Fund (PIF) have offered Liberty Media $20-Billion to buy Formula 1, an offer the sport’s owner refused, as the report even mentioned the Saudi offer is still on the table.
Shortly after that, FIA president Mohammed Ben Sulayem, took to social media to warn about the F1 valuation figure floating around, claiming it is inflated, adding that any new potential owner for the sport should have a plan for its future.
Ben Sulayem tweeted: “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.
“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.
“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,” he added.
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
Liberty Media not happy
Back in 2000, former FIA President, Max Mosely, and former F1 CEO, Bernie Ecclestone, struck a 100-year lease agreement by which the FIA transfers the commercial rights of the sport to F1’s holding company against a $300-Million fee. The deal, which extended an existing 15-year one, runs until 2110.
The aforementioned lease agreement stipulates that the FIA do not interfere in any commercial F1 matters, as their role is strictly confined to the regulatory side.
According to a report in Motorsport.com, Liberty Media seems to believe that Ben Sulayem’s recent comments are considered an interference in F1’s commercial matters.
The report revealed that Liberty Media have, through F1’s legal department, sent a letter to the FIA – also shared with F1 teams – expressing their “dismay” with Ben Sulayem’s statements.
Also according to the report, the letter stated: “The FIA has given unequivocal undertakings that it will not do anything to prejudice the ownership, management and/or exploitation of those rights.
“We consider that those comments, made from the FIA President’s official social media account, interfere with those rights in an unacceptable manner.”
FIA might be liable to any damages to F1
Sky Sports F1 also reported on the matter, adding further details from the letter F1 management sent to the FIA regarding Ben Sulayem’s comments.
According to Sky’s report, the letter claimed Ben Sulayem’s comments “interfered with our [commercial] rights in an unacceptable manner” adding that “Formula 1 has the exclusive right to exploit the commercial rights in the FIA Formula One World Championship” under the 100-year agreement.
The letter from F1 to the FIA also reportedly also claimed “that any potential purchaser of the Formula 1 business is required to consult with the FIA is wrong” insisting that Ben Sulyam had “overstep[ped] the bounds of the FIA’s remit”.
It added that “any individual or organisation commenting on the value of a listed entity or its subsidiaries, especially claiming or implying possession of inside knowledge while doing so, risks causing substantial damage to the shareholders and investors of that entity, not to mention potential exposure to serious regulatory consequences”.
F1 also threated the FIA might be liable to any damages caused to the business by Ben Sulayem’s comments stating that: “To the degree that these comments damage the value of Liberty Media Corporation, the FIA may be liable as a result.”