US media billionaire John Malone was keen to buy into the Formula One group last year, but for whatever reason (some say money, others say Bernie Ecclestone) the US cable magnate decided against the idea and instead made a much smaller investment to buy a chunk of Formula E. Malone’s objective was to acquire content for his cable empire and he knows that live sport is the most effective way to attract subscribers and so he may just be waiting to see what happens in F1 and could jump in again later if things change.
F1 is really of very little importance in Malone’s world, as he continues his quest to consolidate the global cable market. He has just taken a major step towards that by agreeing a $130 billion purchase deal with two of his rivals – Time Warner Cable and Bright House. The deal will turn Malone’s Charter Communications into the world’s biggest media company with operating profits that will likely be three times those of Rupert Murdoch’s empire. It will also create a firm with 75 million cable subscribers around the world, although to keep competition authorities happy Charter will still only be the second largest U.S. Cable firm, its 24 million subscribers still being fewer than Comcast’s 27 million customers.
A Formula 1 deal remains a very sensible step for Malone. F1 remains the world’s most effective live sport, with a concentrated audience at regular intervals. Soccer is bigger but it is much more complicated because there are too many matches and things like the Olympics and the FIFA World Cup do not happen frequently enough. F1 is perfect because not only would it bring Malone more customers and, because his content is bundled with such things as Internet access and phone calls, it would also boost F1’s flagging viewer numbers. It would be a sweet deal for Malone because Murdoch would have pay him for the rights if he wants to continue using F1 to increase the global Sky subscriber base.
The other element that such a deal would bring would be much more F1 exposure in the US.
The key question is really whether Malone did not do a deal with CVC because they wanted too much money, or whether it was because he did not want Ecclestone involved. At CVC the pursuit of profit is the only goal and it is odd that they did not jump at this chance. Malone was willing to pay decent money for the business and CVC would be happy to be shot of the investment and they really don’t care what happens to the sport once they have sold up, so it is strange that the opportunity was wasted.
Unless, of course, Ecclestone must be “sold” with the business…