A major rift between the FIA and Formula 1 has erupted, resulting in a legal warning being issued. While the action on the track is yet to begin, the past few days have been filled with plenty of action off the track.
The tension began with a Bloomberg report that claimed Liberty Media, the commercial rights holders of F1, had rejected a $20 billion bid from Saudi Arabia to buy F1. In response to this news, FIA President Mohammed Ben Sulayem expressed his concerns on Twitter about the alleged inflated price tag being put on F1.
“As the custodians of motorsport, the FIA, as a non-profit organization, is cautious about alleged inflated price tags of $20bn being put on F1,” he wrote. “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.”
These comments did not sit well with F1, as they have since issued a legal notice through F1’s General Counsel, Sacha Woodward Hill, and Renee Wilm, chief legal and administrative officer of Liberty Media.
The notice states that “Formula 1 has the exclusive right to exploit the commercial rights in the FIA Formula One World Championship” and that “the FIA has given unequivocal undertakings that it will not do anything to prejudice the ownership, management, and/or exploitation of those rights.”
The statement further alleges that Sulayem’s comments, made from the FIA President’s official social media account, interfere with F1’s rights in an unacceptable manner.
“Any individual or organization 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,” the notice warned. “Not to mention potential exposure to serious regulatory consequences.”
F1’s legal notice ended with what many interpret as a threat of legal action, stating that “to the degree that these comments damage the value of Liberty Media Corporation, the FIA may be liable as a result.”
The situation remains tense, with F1’s warning drawing criticism from some quarters. Many believe that the issue at the heart of this dispute is the question of who controls the sport, and whether it should be treated as a purely commercial enterprise or as a public good. The FIA, as the governing body of motorsport, has a responsibility to ensure that the sport is run in the best interests of all its stakeholders, while F1’s owners have a responsibility to maximize profits for their shareholders.
For now, it remains to be seen how this dispute will play out, but it is clear that tensions are high, and both sides are digging in for a fight.
