FIA role in F1 sale to Liberty Media under investigation

FIA F1 flags logos

France based financial corruption investigators are looking into the role played by the FIA in the $4.4-billion sale of Formula 1 to Liberty Media.

New York Times reports that the investigators are wanting to know if there was a conflict of interest when the FIA consented to the sale which when accounting for debt totaled $8-billion

Parquet National Financier, who investigate suspected corruption in sports, are handling the matter after the Serious Fraud Office in Britain started made a preliminary enquiry in the aftermath of the sale.

The New York Times wrote: “Investigators’ concerns center on a deal known as the Concorde Agreement that the federation signed in 2013 in its role as the overseer of Formula 1. The accord between racing teams and the owner of the series at the time allowed the federation to benefit from an increase in annual payments for its role.”

“The federation also received a one-time $5 million payment and was allowed to buy a one percent share [worth $80-million] in Formula 1 for about 100 times less than its true value; it could not sell its share until the series’ majority owner, CVC Capital Partners, sold out.”

The FIA said in a statement: “We are entirely confident that any investigation would find that the F.I.A. has acted appropriately at all times, and we stand ready and willing to cooperate with any enquiries should any investigation be commenced or clarification sought by the appropriate authorities.”

In April this year, when the Serious Fraud Office initiated their investigation, the FIA released the following statement: “The Concorde Implementation Agreement entered into by the commercial rights holder (CRH) of Formula 1 and the FIA in 2013 introduced a new governance structure for Formula 1 and redefined certain conditions applicable to their relationship, in particular to ensure that the FIA be properly remunerated for its regulatory role.

“Within this agreement, a lump sum payment of $5-million was made to the FIA as part of the global consideration received in connection with the renegotiation of the terms of the agreements between the commercial rights holder and the FIA, and of the Concorde Agreement, at that time.

“Following its approval, the Concorde Implementation Agreement came into force and this sum was paid to the FIA and properly accounted for. No individual received any payment out of this sum. Any allegation to the contrary would be defamatory.”

It added: “There is no conflict of interest on the part of the FIA with regard to its approval of the change of control of the CRH which has been approved… taking into consideration exclusively the terms of the existing agreements between the CRH and the FIA and the best interests of the Championship…”

“The FIA could only have withheld its consent in the event that the change of control would materially alter the ability of the CRH to fulfil its obligations; it is obvious that the taking of control of the Formula One Group by Liberty does not create such a risk.”

In light of the new investigation, New York Times quote Damian Collins, the chairman of the digital, culture, media and sport (DCMS) select committee, who in March made the initial complaint to investigators in London, who had familiarised himself with the Concorde Agreement and said he could find “no logical explanation” for the deal agreed with the FIA.

And added: “The question is, does acting that way influence the decision that was made?”