Liberty Media said it has completed its $4.4 billion purchase of Formula 1, officially installing former 21st Century Fox vice chairman Chase Carey as chairman and CEO and racing legend Bernie Ecclestone as chairman emeritus. 

“We are delighted to have completed the acquisition of F1 and that Chase will lead this business as CEO,” Liberty Media CEO Greg Maffei said in a statement. “There is an enormous opportunity to grow the sport, and we have every confidence that Chase, with his abilities and experience, is the right person to achieve this. I’d like to thank Bernie Ecclestone, who becomes Chairman Emeritus, for his tremendous success in building this remarkable global sport.”

Liberty first announced the agreement to buy Formula 1 in September. The company received approval from Fédération Internationale de l'Automobile (“FIA”), the governing body of the motor racing icon, earlier this month, the last regulatory hurdle in completing the deal. 

“I am excited to be taking on the additional role of CEO. F1 has huge potential with multiple untapped opportunities,” Carey said in a statement. “I have enjoyed hearing from the fans, teams, FIA, promoters and sponsors on their ideas and hopes for the sport. We will work with all of these partners to enhance the racing experience and add new dimensions to the sport and we look forward to sharing these plans overtime.”

“I would like to recognise and thank Bernie for his leadership over the decades," Carey continued. "The sport is what it is today because of him and the talented team of executives he has led, and he will always be part of the F1 family. Bernie’s role as Chairman Emeritus befits his tremendous contribution to the sport and I am grateful for his continued insight and guidance as we build F1 for long-term success and the enjoyment of all those involved.”

Liberty Media plans to rename itself the Formula One Group and will change its ticker symbol on the NASDAQ Exchange from LMC to FWON, soon after the group name change has become effective, expected later this week. F1 will remain based in London and Maffei will be Deputy Chair of the board of F1. 

“I’m proud of the business that I built over the last 40 years and all that I have achieved with Formula 1, and would like to thank all of the promoters, teams, sponsors and television companies that I have worked with,” Ecclestone said in a statement. “I’m very pleased that the business has been acquired by Liberty and that it intends to invest in the future of F1. I am sure that Chase will execute his role in a way that will benefit the sport.”

Liberty Media said it will issue Series C common stock worth $1.55 billion to third party companies in an effort to help fund its $4.4 billion purchase of motor racing icon Formula 1.

In a statement, Liberty said it issued the Series C common stock at $25 per share to Coatue Management, L.L.C., the D. E. Shaw group, JANA Partners LLC, Ruane, Cunniff & Goldfarb Inc., Soroban Capital Partners LP, SPO Advisory Corp., and Viking Global Investors LP. The issuance of the shares will be completed concurrently with the completion of the Formula 1 acquisition.

"We are excited that this impressive list of investors will participate in the acquisition of Formula 1,” Liberty CEO Greg Maffei said in a statement. “This group shares our enthusiasm for the sport and our belief in the opportunity to develop and grow it for the benefit of the fans, teams, sponsors and our shareholders. We look forward to closing the transaction in early 2017.”

Liberty agreed to purchase Formula 1 in September.

Liberty said the proceeds from the issuance will be used to increase the cash portion of the consideration payable to the selling Formula 1 shareholders, led by CVC Capital Partners. As a result, the number of Series C Liberty (LMCK) shares issuable to the Selling Shareholders at the closing of the Formula 1 acquisition will be reduced from approximately 138 million to approximately 76 million. The total number of LMCK shares to be issued by Liberty Media in connection with the acquisition of Formula 1, to both the selling shareholders and the third party investors, remains unchanged at approximately 138 million shares.

“This is a significant step in Liberty Media’s transformative acquisition of Formula 1 and is further confirmation that the future of the sport is bright,” Formula 1 chairman Chase Carey said in a statement.

John Malone’s systematic transformation of Liberty Media continued last week, after the former programming juggernaut agreed to purchase international racing icon Formula One in a $4.4 billion deal.

After the deal is sealed — expected in early 2017 — Liberty Media Group will change its corporate name to Formula One Group and retire its NASDAQ stock exchange ticker symbol “LMCA,” replacing it with “FWON.”

The Liberty Media Corp. name will live on, at least in the ether — Liberty Media Group is officially a tracking stock of Liberty Media Corp., along with Liberty Braves and Liberty Sirius, which will remain separate.

Malone, Liberty Media chairman, has spent the better part of the past decade breaking apart and spinning off the Liberty assets in a flurry of deals. Liberty Media, which used to house interests in major programmers like Discovery Communications and QVC, has long since spun those holdings out to shareholders.

DEALMAKER’S LATEST DEAL

The deal is the latest over the past three years by the mogul known for dealmaking, beginning with his purchase of a 27% interest in Charter Communications in 2013. In the wake of that deal, Malone helped engineer Charter’s $78.7 billion purchase of Time Warner Cable and its $10.4 billion buy of Bright House Networks.

Other Malone holdings have gone on international buying sprees, like Discovery Communications, which earlier this year bought sports network Eurosport in 2015 and European Olympics rights for the 2018-2024 games.

In addition, Malone was a key part of Lionsgate’s $4.4 billion purchase of premium channel Starz in June.

Liberty has been in pursuit of Formula One since 2014, when speculation was high Liberty would team with Discovery to buy a 49% interest in the racing icon for about $4 billion. That deal never materialized, but with the most recent transaction, Liberty will get control of one of the hottest properties in international sports.

Formula One splits its revenue between race promotions — it holds the FIA F1 World Championship, among other races — broadcasting, advertising and sponsorship, and other businesses including TV production, hospitality and licensing, according to Liberty. With revenue of about $1.8 billion in the past 12 months, Formula One said it has $9.3 billion in revenue under long-term contracts through 2026.

Liberty shareholders will own 35% of Formula One’s equity (including about 3.1% for Malone personally), with partner CVC Capital Partners controlling 65%. In addition, former 21st Century Fox executive Chase Carey, long a confidante of Fox chairman Rupert Murdoch, will become Formula One’s new chairman after the deal closes, replacing Nestle chairman Peter Brabeck-Letmathe. Controversial British financier Bernie Ecclestone, who built Formula One into a global operation after nearly 40 years, will remain as CEO.

In typical Liberty fashion, the deal is a complicated one. Liberty closed the first part of the deal on Sept. 7, purchasing an 18.7% stake in Formula One for about $746 million. In the second stage, expected to be completed in the first quarter of 2017, Liberty will purchase the remaining voting interest in the company for about $300 million in cash, $350 million in notes and by issuing about 138 million shares of stock worth about $2.9 billion.

On a conference call with analysts to discuss the transaction, Carey said he would build Formula One’s fan base by telling its story. Formula One already is one of the most popular sports properties in the world, with more than 400 million global viewers, but has had difficulty cracking the U.S. market, which is dominated by NASCAR stock car racing. But U.S. viewership is growing, up by about 40% since NBC Sports won domestic broadcast rights in 2013.

DIGITAL GROWTH OPPORTUNITY

Liberty Media CEO Greg Maffei said on the call that the company believes there is opportunity to grow Formula One’s “underdeveloped” digital assets, adding that the company could grow its fan base and revenue through new technologies like virtual reality and via video games.

“There’s interest in this sport around the world,” Carey said on the call. “We want to continue to intelligently explore the opportunities and continue to grow it.”

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak, called Formula One a “prototypical Malone investment” in that it has a high barrier to entry, a lasting business, evidenced by the $9.3 billion in long-term contracted revenue, and appears to have strong expansion opportunities.

“As we have seen with the NFL, you can expand your broadcast rights fees and create alternative distribution channels (national nets, to DirecTV [NFL] Sunday Ticket, to Thursday Night Football to the RedZone channel),” Wlodarczak wrote in an e-mail message. “They could also look into expansion of races from 21 to the current contractual limit of 25 (the U.S. could be a massive driver of growth long term), repricing of TV contracts materially higher, leveraging ‘sister’ Liberty companies [Liberty Global] and [Discovery’s] Eurosport, expanding digital opportunities.”

Liberty Media, ending years of speculation, said it will purchase racing icon Formula One from a consortium led by CVC Capital Partners for $4.4 billion.

Liberty Media headed by legendary dealmaker John Malone, has been in the hunt for the racing company since at least 2014.

According to Liberty, the transaction comprises cash and newly issued shares in the Liberty Media Group tracking stock and a debt instrument exchangeable into shares of LMCK. The transaction price represents an enterprise value for Formula One of $8 billion and an equity value of $4.4 billion.

In typical Liberty fashion, the deal isn’t an easy one. According to terms, Liberty will acquire 100% of Formula One parent Delta Topco by first buying an 18.7% interest in the unit for $746 million in cash. Former 21st Century Fox vice chairman Chase Carey has been named chairman of Delta Topco, succeeding Peter Brabeck-Letmathe, who will remain on Formula One’s board as a non-executive director. Bernie Ecclestone will remain Formula One’s CEO.

“I am thrilled to take up the role of Chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team, Carey said in a statement. “I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world. I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike.”

After completion of the acquisition, Liberty Media will own Formula One and it will be attributed to the Liberty Media Group which will be renamed the Formula One Group. The consortium of sellers led by CVC will own about 65% of the Formula One Group’s equity and will have board representation at Formula One to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will be joining the Liberty Media Board of Directors.

“We are excited to become part of Formula One,” Liberty Media CEO Greg Maffei said in a statement. “We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders. We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport.”

The selling stockholders will receive a mix of consideration comprising: $1.1 billion in cash, 138 million newly issued shares of LMCK and a $351 million exchangeable debt instrument to be issued by Formula One and exchangeable into shares of LMCK. Upon completion of the acquisition, the Liberty Media Group will be renamed the Formula One Group and the ticker symbols for its shares will change to FWON. Formula One will remain based in London.

“I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them,” Ecclestone said in a statement.

With Viacom turning the page after the long-anticipated ouster of CEO Philippe Dauman and the temporary ascension of chief operating officer Tom Dooley to the CEO spot, all eyes are on what is next for the youth-oriented programmer.

While Dooley reaches out to investors and has vowed to work with Viacom’s board on its future organization and plans, there has been no shortage of suggestions as to where the programmer goes from here, ranging from an outright sale to a more intense focus on kids’ programming.

Dooley, a loyal lieutenant to Dauman for more than 30 years, is officially serving as interim CEO until the end of the fiscal year on Sept. 30. While he is also in the running for the permanent spot, many analysts believe his ties to Dauman and the old Viacom regime limit his chances. As MoffettNathanson senior research analyst Michael Nathanson wrote in a blog post last week, “We wonder how much of an agent of change he will be.”

PLENTY OF CANDIDATES

Analysts have speculated about possible replacements for Dauman for months, but in the past few weeks changes at 21st Century Fox could free up two well-respected executives for the Viacom slot — co-chief operating officer Chase Carey and Jim Gianopulos, head of studio 20th Century Fox Film Corp.

Gianopulos — who some have said would give Viacom instant credibility, at least on the fi lm side — had already planned to step down at the end of the year so longtime executive Stacey Snider could take over the studio. Last week he accelerated that time frame to Sept. 1, which would make him available for the Viacom job.

Carey also could be ready for a fresh start, as Fox CEO James Murdoch and executive chairman Lachlan Murdoch have recently been flexing their muscles — they were reportedly behind the Snider appointment and have taken quick action in the sexual harassment scandal involving Fox News chairman Roger Ailes. Carey, who stayed on to help with the Murdochs’ transition, may feel that it is time to move on. He also has a stellar track record in turning around companies like DirecTV.

Other possible candidates include former The Walt Disney Co. chief operating officer Tom Staggs, who abruptly resigned in April, and former DreamWorks Animation CEO Jeffrey Katzenberg, who sold his company to Comcast earlier this month. Katzenberg walked away from that deal $390 million richer, mainly in the form of vested stock options, and is reportedly more interested in short-form content creation, which he feels is the future of the business.

Whoever takes Viacom’s helm will have their work cut out for them. Ratings and ad revenue has plummeted and more distributors are toying with the idea of doing without some or all of the company’s channels.

CUTTING CHANNELS

Morgan Stanley media analyst Ben Swinburne suggests that a possible turnaround path is to slash the number of Viacom channels from nearly 20 to five or six (MTV, Nickelodeon, Comedy Central, BET and Spike). Swinburne wrote that Viacom should also address its younger audience by drastically reducing ad loads, hold back on SVOD licensing and refocus its attention on Nickelodeon.

“In our view, Nickelodeon is the crown jewel, and has seen some content success of late on both Nick and Nick Jr.,” Swinburne wrote. “We argue building this network(s) is the key to long-term durability of the company, and Viacom may need to (at least for now) leave its content exclusive to its networks and apps.”

Viacom also should make the direct-to-consumer market a priority, Swinburne added, as the market potentially shifts to a place where consumers buy moderately priced OTT apps and bundles to serve their needs.

“For Viacom, investing in the capabilities to move DTC seems critical, perhaps prepping to offer consumers a bouquet of apps focused on kids, music, and comedy,” Swinburne wrote. “Given Viacom’s legacy target audience, it should be leading in this area, experimenting more than others with different models, not following.”

BTIG media analyst Rich Greenfield wrote that an outright sale could be a better path for Viacom shareholders, especially as it is still considering a partial sale of its Paramount Pictures movie studio.

While Viacom’s controlling shareholder, Sumner Redstone, has objected to the partial sale of Paramount, he may be open to selling the whole thing. And with some estimates putting Paramount’s value at $10 billion, it might be a better move for potential buyers to purchase the entire company — which has an enterprise value of about $27 billion — and sell off the pieces it doesn’t want.

CBS DEAL MAY NOT HELP

Greenfield also advocated for a recombination with corporate sister CBS, a move that other analysts have backed. But there is still little incentive for CBS shareholders to press for a deal.

Even Nathanson, who has called the 2006 CBS-Viacom split the biggest mistake the company ever made, can see little in deal synergies for CBS in a recombination. In his blog post, Nathanson estimated that putting Viacom and CBS back together would result in a gain of just 5.6% (or about 24 cents per share) for CBS stockholders.

“While a new CEO might look to fi x all that is wrong at Viacom, we find it hard to believe that anything will be solved until the CBS Viacom pieces are put back together again,” Nathanson wrote.

As the battle for control of Viacom continues to be waged in the courts, Telsey Advisory Group media analyst Tom Eagan said he was “cautiously optimistic” about the overall pay TV ad climate, adding that replacing Viacom executive chairman and CEO Philippe Dauman with 21st Century Fox vice chairman Chase Carey or DreamWorks SKG chief Jeffrey Katzenberg could help boost the stock.

Viacom stock was down about 40% in the 12 months prior to moves by its controlling shareholder Sumner Redstone to remove Dauman from the trust that will manage his shares in the event of his death or incapacitation. That battle still rages in Massachusetts Probate Court and elsewhere and has cast a pall on the overall company, but has been understandably good for the stock. Viacom shares have climbed during the cat fight, up a total of 7.2% since May 20. And all of that growth can be attributed to the growing possibility that Dauman, who has been under fire for poor decision making over the years, will be ousted from the C-suite. Dauman joked at the Gabelli Movie & Entertainment conference last week that it was better to create content than become it, but his fate appears to be the only thing concerning investors at the moment.

Carey, who became Fox vice chairman in 2015 and is largely in that role to help founder Rupert Murdoch’s sons James and Lachlan transition into eventually running the whole shooting match, has a stellar track record with troubled companies. He basically resurrected DirecTV when he was CEO at that satellite TV service provider in 2003 and stayed about six years, returning what had been a struggling operation to robust subscriber growth, before returning to then-Fox parent News Corp. in 2009. Carey helped News Corp. through the split that created two separate companies – Fox, the programming arm and News Corp. the publishing arm – unlocking value for both. While there is little doubt he could help Viacom – he has been running content businesses for most of his career – the question is whether he would want to take on the challenge. Viacom, which has struggled with declining ratings and sluggish ad growth, may be too far gone for the seasoned executive to even bother.

Katzenberg, who helped create Disney’s modern animation business and has had some successes with DreamWorks – like the Madagascar and How to Train Your Dragon series of films and TV shows – will step into an advisory role after the sale of the content creator to Comcast’s NBC Universal is completed later this year. Katzenberg, 65,  has the content chops, particularly in the kids’ business, but again it could be a question of whether he wants to take on the challenge.

There are other experienced executives in the pool – Eagan said former Disney COO Tom Staggs also would be cheered by Wall Street – so there is no shortage of possible replacements.

And like other analysts who have pointed to the structure of the trust and the board make-up, it doesn’t really matter if Redstone is declared incompetent or not.

“The Redstones have already won,” Eagan wrote.    

In the meantime, the traditional pay TV networks business, thought to be on its way out as over-the-top services and skinny bundles transform the industry, is expected to be surprisingly strong.

Eagan expects the strong scatter market will continue into the Upfront negotiations and third quarter spending. He believes that the move toward cross platform measurement in the first half of next year will help comparables, but expects CBS, Time Warner Inc., and Fox to generate mid-to-high single-digit ad revenue gains in fiscal 2016.

At Viacom the outlook is less rosy. Eagan predicts Viacom will have “lackluster” fiscal x quarter results, but he believes that performance already is built into estimates.  For the full fiscal year, Eagan expects ad revenue at Viacom to decline about 2%, better than the 2.9% decline in fiscal 2014 but worse than fiscal 2015’s 0.7% deficit. Affiliate fee growth of 1.6% in fiscal 2016 is behind the 3.6% rise last year and the 11.3% increase in 2014.

In contrast, Eagan expects CBS to grow ad revenue by nearly 10% in 2016, up from a 3.3% decline in 2015, while affiliate fees increase 4.1%, compared to 0.5% growth in 2015.

Top 21st Century Fox executives saw their total compensation shrink in fiscal 2015, with chairman Rupert Murdoch dipping 4.5% and his son James weathering a 19.3% haircut, while top lieutenant, chief operating officer Chase Carey’s pay dipping 17.1%.

Rupert Murdoch’s total compensation was $27.9 million, down 4.5% from the $29.2 million he earned in fiscal 2014. James Murdoch, who received a big vote of confidence from his dad earlier in the year when he handed over the CEO reins to him in July, received $15.1 million in total comp, down from $18.7 in fiscal 2014. The difference for both men was in stock awards – Rupert Murdoch received $5.1 million in stock awards in fiscal 2015 compared to $6.3 million in the prior year. James received $5.4 million in stock awards in fiscal 2015, down from $6.6 million in fiscal 2014.

For Carey, who became executive vice chairman in July, fewer stock awards ($9 million vs. $11.1 million in fiscal 2014) helped drive down his total compensation to $23.2 million from $27.98 million in the prior year.

Senior executive vice president and chief financial officer John Nallen also took a hit, with his pay dipping 14.6% from $9.6 million to $8.2 million, mainly because of a lower stock award ($2.7 million vs. $3.1 million in the prior year). The only top executive to get a raise was senior executive vice president and general counsel Gerson Zweifach, who received a 48.3% increase to $8.6 million from $5.8 million in the prior year, primarily due to a larger stock award ($2.3 million vs. $276,352 in fiscal 2014).

Twenty-First Century Fox chairman and CEO Rupert Murdoch’s total compensation rose slightly in fiscal 2014, a year after the media conglomerate split into two separate companies.

According to a proxy statement filed Monday, Murdoch received $29.2 million in total compensation in fiscal 2014, a 1% rise over the $28.9 million he received in fiscal 2013.

Murdoch’s News Corp. completed the split which cleaved its holdings into two separate companies – 21st Century Fox, which holds its television assets such as the Fox Broadcasting network and its cable holdings; and News Corp., which includes its publishing assets – on June 28, 2013.

Murdoch’s base salary actually declined for the year to $7.1 million from $8.1 million and his non-equity incentive plan compensation dipped from $12.5 million in fiscal 2013 to $10.2 million in fiscal 2014. He more than made up the difference with $6.3 million in stock awards (up from $5.2 million in the prior year) and $5.4 million in non-qualified deferred compensation earnings (up from $2.8 million in the prior year)

Chief operating officer Chase Carey’s total compensation rose 3.5% in the period,, to about 28 million, up from $27.05 million in fiscal 2013. Co-COO James Murdoch – Rupert’s son – had the biggest increase (9.7%) to $18.7 million from $17.04 million in fiscal 2013.