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Why Liberty Media’s purchase of Formula 1 might not get the green light

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The $8.5 billion sale of motorsport franchise Formula 1 could be driven off track by an ownership conflict of interest, according to one industry expert.

U.S.-based Liberty Media, which already has stakes in several sports business including the Atlanta Braves baseball team, is in advanced talks to buy Formula 1's controlling stake from private equity firm CVC Capital Partners.

Several media reports suggest the deal is set to cross the finish line this week, but one commentator believes the approval process could prove tricky to negotiate.

"I'm sure the deal will be signed but I can't see how it could get the green light after that due to a conflict of interest at the heart of the approval process," said Formula One writer and journalist Christian Sylt in an email to CNBC.

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Sylt claimed the sale needs to be approved by the European Commission (the executive arm of the European Union) as well as the F1's regulator the FIA, which owns a 1 percent stake in the sport worth around $100 million.

"I recently found out that the FIA is only allowed to cash in its shares when F1's current owner CVC sells and this creates the conflict of interest," Sylt said.

"In the current climate of heightened corporate responsibility in sport I find it surprising that any regulator could put itself in a position where it could get a sum like $100 million from a sale which it has to decide whether to allow," he added.

Liberty Media, the FIA and CVC Capital Partners were not immediately available for comment when contacted by CNBC.

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