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Tuesday, June 25, 2024

Formula 1 Team Deal Highlights Increasing American Enthusiasm for the Sport

Investors have started to look outside the usual channels, at teams and sports that just a few years ago had low profiles in the United States, as media businesses and large internet firms compete for sports fans.

Actor Ryan Reynolds and his investment business Maximum Effort Investments; private equity firm RedBird Capital Partners and its investing partner Capital, all took part in the most recent acquisition for a fifth-ranked Formula 1 team owned by one of France’s leading motor firms. They’re investing $24 million to acquire a 24% interest in the Alpine F1 Team from the Renault Group. The squad is being valued at over $900 million, with the investors spending around 200 million euros ($218 million) for a share.

Since being purchased by Liberty Media in 2017, Formula 1 has seen a surge in popularity in the United States. The Netflix documentary “Drive to Survive” brought renewed interest to the sport, and with its expansion to areas like Las Vegas and Miami, attendance has risen.

Renault’s goal is to have more than half of its sales be in E.V.s by 2030, and this purchase will help bring greater attention to its Alpine brand of electric vehicles. Luca de Meo, CEO of Renault, said in a press statement that the acquisition will boost Alpine F1’s market value.

Alpine CEO Laurent Rossi said in a press statement that the firm will be providing more funding for the team in an effort to improve its standing.

Alec Scheiner, CEO of Otro Capital, said in an interview that the Alpine acquisition was finalised over the course of the previous 18 months. The agreement calls for him to join Alpine’s board of directors.

Mr. Scheiner, a former partner at RedBird Capital, has held positions as a vice president with the Dallas Cowboys and as the director of business operations for the Cleveland Browns of the National Football League. Otro is a new company that sprang out of RedBird to specialise on sports-related fundraising. This is their first contract.

Gerry Cardinale’s RedBird has invested in a number of different sports and entertainment businesses, including the Fenway Sports Group, the YES Network, the A.C. Milan soccer club in Italy, and the production firm co-founded by Ben Affleck and Matt Damon. It invested $37.5 million in the Indian Premier League cricket franchise Rajasthan Royals in 2021. Indian Cricket television rights set a new high last year, further establishing the league as one of the most lucrative in the world.

Maximum Effort did not comment on the magnitude of its investment in Aviation Gin or in the Welsh football side Wrexham AFC. Michael B. Jordan (the actor) and Rob McElhenney (a co-owner of Wrexham AFC) are among the other investors.

David Faber
David Faber
I am a Business Journalist of The National Era
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