F1 teams face 10-year wait to sell shares under Liberty plot

Formula One (F1) teams which buy shares in the sport's holding company will be forced to retain them for at least a decade as part of a deal engineered by its prospective new owners.

Sky News has seen a prospectus circulated last week outlining Liberty Media Group's proposals to offer every F1 constructor a direct economic stake in the sport.

The document hints at Liberty Media's plans for radical changes to the administration and marketing of F1, and reflects a request from some team-owners for greater alignment between them and the sport's parent.

It also raises the prospect of changes to the role of Bernie Ecclestone, the sport's veteran chief executive, referring to shareholder directors being "notified and consulted at least five business days in advance of a change of control or change of CEO".

According to the term-sheet circulated in recent days, the two teams holding the largest number of Liberty Media Corp stock will have the right to nominate one director each to the board of Delta Topco, F1's immediate parent company.

A small number of teams, including Ferrari (Xetra: 30092157.DE - news) , already have rights to nominate one director to the Delta Topco board.

In a nod to the need to draft in greater commercial expertise to F1, the term sheet says that "an independent person (may) be an investor director if its nominee is an experienced business person with a demonstrable track record without conflicts of interest".

Eleven constructors competed in the 2016 World Championship, but there are now grave doubts about Manor Racing's ability to participate in this year's series after the company which operates the team collapsed into administration last week .

Liberty's plans will allow each of the teams to purchase a maximum of 5% of the company's shares, with an option to scale back the total number of shares sold to teams to an aggregate 22% if the offer is fully subscribed.

One F1 insider described the placing as "a goodwill gesture" because they were being sold at $21.26-a-share, a substantial discount to both Liberty Media Group's current stock price and a $25-a-share offering to institutional investors which took place last month.

The latest developments come as Liberty Media prepares to finalise its takeover of F1 in the coming weeks, with a vote by its shareholders due to take place on January 17, and approval from the motorsport governing body, the FIA, expected shortly afterwards.

CVC Capital Partners, the private equity firm which has controlled F1 since 2005, will be left holding roughly 15% of the sport's shares after the deal closes, with control of the company formally passing to Liberty Media.

Chase Carey, who became F1's chairman in the autumn, is already drawing up plans for significant changes to the way that F1 is run, and is lining up Sean Bratches, a former ESPN executive, to take on responsibility for the sport's marketing, sponsorship and media rights alliances.

F1 has not previously had a dedicated marketing or sponsorship supremo, with most of F1's commercial partnerships negotiated by Mr Ecclestone, who has run it for decades.

The Financial Times reported last month that Mr Carey wanted to turn each of the year's Grands Prix into a Super Bowl-style event in a bid to attract new sponsors.

In another break with the past, sources said that F1's prospective new owners had identified new office space in central London from which they intend to run its commercial operations.

Referring to the institutional investors which subscribed for shares last month, Liberty Media president Greg Maffei said: "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."

F1's new shareholders are said to have been surprised at the comparatively undeveloped approach to exploiting its commercial rights compared to other global sports franchises.

Liberty Media declined to comment.