Liberty's F1 betting gamble pays out immediately

Liberty Media's decision to jump into bed with gambling companies has polarised fans, reversed four decades of Formula 1 tradition, but it has also immediately began to pay off for F1's American owners. F1's share price climbed a meaty 7.4% on Tuesday after Liberty's latest deal was revealed.

Former owner Bernie Ecclestone was a long-time opponent of betting sponsorship and F1 having any kind of relationship, believing it could damage the brand worldwide.

But marketing agency Interregional Sports Group (ISG) have reached an agreement with Liberty and it is understood that they will pay the full $100m amount up front, with ISG then tasked with securing deals with betting companies on a local or global basis.

As part of the deal betting sponsors will be able to advertise on electronic boards at race tracks and display graphics on-screen including, potentially, live odds on the race itself.

Managing Director of F1's commercial operations, Sean Bratches, told the Financial Times that deals such as this increase revenues to the teams and, therefore, should enhance the spectacle for the viewer.

He said: “There’s an understanding that sponsorship injects economics into the sport that improves the sport to the fan. You have to balance that with how you serve fans. This is an opportunity that serves both of those masters.”

The share price of F1 plummeted earlier this month when it was revealed that not a single engine manufacturer had expressed a serious interest in the series on the back of Liberty's grand plans for 2021 and beyond.

But a potentially huge cash injection and a sure-fire long-term stream of income have not only reversed the damage, but taken F1's share price to a three-month high of US$38.75 on the NASDAQ.

Ferrari CEO Louis C Camilleri has warned Liberty that the Scuderia remains uncertain about long-term participation in F1, which could have an impact on the company's value yet again.

MORE: F1 fans enraged by Liberty Media's gambling deal