Newcastle United owners 'explored' massive £16bn bid to buy F1

20 January 2023 , 18:16

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Yasir Al-Rumayyan has taken up the role of chairman at Newcastle (Image: Getty Images)

Saudi Arabia's Public Investment Fund (PIF) reportedly considered a huge bid of more than £16bn to purchase Formula 1.

The sports has gone from strength to strength in the past few years, under the stewardship of current owners Liberty Media. Since the American corporation agreed to buy a controlling stake in the sport, paying around £3.3bn, it has gone from haemorrhaging money to becoming more profitable and sustainable.

And worldwide interest is at an unprecedented level, thanks to efforts to attract a new audience such as the Drive to Survive Netflix docu-drama and a very effective change in social media policy. So it is only natural that F1 has become an attractive investment opportunity for some of the world's wealthiest groups.

The Saudi PIF can certainly count itself in that category. It is one of the biggest sovereign wealth funds on the planet with assets of more than half-a-trillion pounds. By 2025, it is estimated that figure may double.

Sport has become an area of focus for the PIF, as evidence by its purchase of Newcastle United in 2021. According to a report from Bloomberg, the Saudis approached Liberty last year with a proposal believed to be worth around £16bn to take a controlling stake in F1.

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Such a figure is above what the sport is believed to be worth, which currently stands at around £12.3m. Nevertheless, Liberty Media have no interest in selling and are said to have rejected the proposal out of hand.

Saudi Arabia's Public Investment Fund led the consortium which bought Premier League football club Newcastle United in 2021 (Getty Images)

Despite that push back, the PIF reportedly "remains interested in the asset" and, should the current owners ever open up to the idea of selling F1, the Saudi sovereign wealth fund will be a "serious bidder".

Much of the attention paid to F1's expansions in recent years have been in the US, a market in which it is making unprecedented progress. But the Middle East has also become an important factor, as evidenced by the fact four races will be hosted in that region this year.

Furthermore, Saudi oil company Aramco has a massive sponsorship deal with the sport and the Aston Martin team. Neom, a futuristic city being build in Saudi Arabia, is also the title sponsor of McLaren's Formula E and Extreme E teams, while the PIF itself is a minority shareholder in the wider McLaren company.

Prince Khalid Bin Sultan Al Faisal wants an F1 team to be based in Saudi Arabia (Getty Images)

Recently, the president of Saudi Arabia's automobile federation Prince Khalid Bin Sultan Al Faisal revealed his desire to have an F1 team based in the country in the future. Given their links to the country, both Aston and McLaren have naturally been linked.

"We want to create a hub," Prince Khalid said. "We have big companies that can help the future of motorsport. [A team being based in Neom] is what we are hoping for and this is what we are working for. Hopefully, we can bring one of the big manufacturers.

"With all the investing we are doing in cars – the PIF bought shares in McLaren and Aston Martin – we are heading that way. Hopefully, we can open and bring headquarters to Saudi Arabia or we hire people that can help us manufacture cars or technology, to create our own brands and have our own IPs."

Daniel Moxon