Saudi Arabia has made a splash in the global sports arena as it seeks to increase its profile on the global stage. Listed oil company Aramco sponsors Formula 1 and is the title sponsor of Aston Martin Racing, and the country will host its first Formula 1 Grand Prix in 2021, but it has big ambitions in the sport. Bloomberg reported that the country’s Public Investment Fund (PIF) made an offer worth more than $20 billion last year to buy F1 from current owner Liberty Media. American Liberty Media bought F1 for $4.4 billion in 2017 but rejected the offer.
Bloomberg reports that PIF remains very interested in buying F1 and will make an offer if Liberty decides to sell. However, given the worldwide popularity of F1, Liberty may not want to give up this property. Liberty Media’s F1 tracking stocks – stocks that track the performance of a business unit, in this case F1 – currently have a market capitalization of $16.7 billion.
If PIF buys F1, it will be debatable to say the least. Saudi Arabia’s human rights situation is dire, and its attempts to enter international sports, from the Formula 1 Grand Prix to the LIV golf championship, are seen as sports money laundering, the practice of using major sporting events to boost its reputation. Lewis Hamilton said he was uncomfortable competing in the country shortly after he received a letter from the family of Abdullah al-Khowaiti, who was arrested at the age of 14. Arrested, tortured and sentenced to death at the age of 17. The Saudi Arabian Grand Prix was almost overcast last year. The explosion at an Aramco warehouse six miles off the track was the result of a rocket attack by Houthi rebels who are fighting the Yemeni government and the Saudi-led largely Arab state fighting alliances. The missile attack occurred during free practice but continued through the remainder of the Grand Prix weekend after the riders had met all night.
In F1, as in all sports, money is everything, and one can imagine that Liberty Media will find it difficult to ignore the progress of the PIF. As F1 continues its explosive growth, Saudi Arabia is increasingly eager to get this asset.
Post time: Jan-28-2023