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CVC and F1


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#101 Madras

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Posted 21 June 2009 - 15:27

If CVC leave FOM is still there and the %s are still the same. The only person who makes less money out of the CVC deal is Bernie because he now has to split his side of the profits with CVC to pay down their debt. Of course he was paid out up front so in the long run he's probably making a profit. But removing CVC doesnt mean the teams get more money.


A breakaway would not have FOM or CVC.

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#102 Ross Stonefeld

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Posted 21 June 2009 - 15:30

Then say what you really mean, is you want FOM out of it. You don't neccessarily want Bernie out because he's good at what he does, but you'd want to renegotiate him on a much smaller comission.

Divide all revenues equally between how many teams are in the field, FOTA itself for admin costs, and Bernie gets an equal share. He'll still make money, just not as much. And I'd rather have him putting together my TV deals.

#103 David M. Kane

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Posted 21 June 2009 - 15:31

Fundamentally where did Ross go?

#104 Madras

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Posted 21 June 2009 - 15:32

Then say what you really mean, is you want FOM out of it. You don't neccessarily want Bernie out because he's good at what he does, but you'd want to renegotiate him on a much smaller comission.

Divide all revenues equally between how many teams are in the field, FOTA itself for admin costs, and Bernie gets an equal share. He'll still make money, just not as much. And I'd rather have him putting together my TV deals.


I think people want bernie out, he is FOM really. And let's face it, he's not as sharp as he used to be, he's losing his touch. It's what happens when people reach 80 years old.

#105 mattorgen

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Posted 21 June 2009 - 15:33

A breakaway would not have FOM or CVC.

Not necessarily. CVC own a great deal of infrastructure (TV cameras, offices, staff contracts etc) which could be very valuable to FOTA's new series. CVC is not stupid, they know that if FOTA goes then their F1 investment will go under and they stand to get nothing back from it so they could cut a deal with FOTA where they sell them the assets (minus the rights to FIA F1 since they don't need or want that) in exchange for minority equity (with no control) in their new series. That way CVC can tell its own investors that they have not lost entirely.

#106 kar

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Posted 21 June 2009 - 15:34

Then say what you really mean, is you want FOM out of it. You don't neccessarily want Bernie out because he's good at what he does, but you'd want to renegotiate him on a much smaller comission.

Divide all revenues equally between how many teams are in the field, FOTA itself for admin costs, and Bernie gets an equal share. He'll still make money, just not as much. And I'd rather have him putting together my TV deals.


In the past I would agree with you. But I genuinely believe Bernie no longer plays with a full deck.

#107 Madras

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Posted 21 June 2009 - 15:34

Not necessarily. CVC own a great deal of infrastructure (TV cameras, offices, staff contracts etc) which could be very valuable to FOTA's new series. CVC is not stupid, they know that if FOTA goes then their F1 investment will go under and they stand to get nothing back from it so they could cut a deal with FOTA where they sell them the assets (minus the rights to FIA F1 since they don't need or want that) in exchange for minority equity (with no control) in their new series. That way CVC can tell its own investors that they have not lost entirely.


But in essense there would be no CVC or FOM controling things, that was my point.

#108 mattorgen

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Posted 21 June 2009 - 15:36

But in essense there would be no CVC or FOM controling things, that was my point.

Totally true.

#109 Ross Stonefeld

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Posted 21 June 2009 - 15:36

In the past I would agree with you. But I genuinely believe Bernie no longer plays with a full deck.


I have no reason to assume he's not running at full potential. Is he not still making ridiculous amounts of money? The teams just finally have him in a position to force him to renogiate the distributions.

#110 Motormedia

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Posted 21 June 2009 - 15:37

In the past I would agree with you. But I genuinely believe Bernie no longer plays with a full deck.


His age is of concern. He hasn't shown the same gusto as he used to... But what the hell, there has to be quite a lot of ruthless people out there qualified for the job.

#111 mattorgen

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Posted 21 June 2009 - 15:38

I have no reason to assume he's not running at full potential. Is he not still making ridiculous amounts of money? The teams just finally have him in a position to force him to renogiate the distributions.

Indeed, in my example above, the teams could also contract in Bernie to run the series. This would be stupid since he has proven time and time again that he will shaft them financially for his own ends and it is only saps like Frank who keep on coming back. However, even if Bernie AND CVC were involved, they would have no control as Madras has pointed out.

Edited by mattorgen, 21 June 2009 - 15:38.


#112 Ross Stonefeld

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Posted 21 June 2009 - 15:42

I don't think he's shafted them ever. They signed up to an agreement that in the long run was as beneficial to him as it was to them. Since he has had the position of strength he has had no reason to renegotiate. It's not personal, it's just business. Now that the playing field has changed, they can renogiate more equal terms.

#113 Madras

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Posted 21 June 2009 - 15:44

I don't think he's shafted them ever. They signed up to an agreement that in the long run was as beneficial to him as it was to them. Since he has had the position of strength he has had no reason to renegotiate. It's not personal, it's just business. Now that the playing field has changed, they can renogiate more equal terms.


You dont think he has shafted them, other people including myself think he has. that's basically what this argument is about. But I'll add that I think he's shafted the fans as well. Night races, evening races, middle east races with 2 camels and a hermit watching in the stands...

Edited by Madras, 21 June 2009 - 15:45.


#114 Ross Stonefeld

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Posted 21 June 2009 - 15:48

I thought twilight Melbourne was a lot more interesting than normal Melbourne and everyone seemed to like Singapore. I don't know what it is about you guys but why does everything have to be so extreme and dramatic?

#115 mattorgen

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Posted 21 June 2009 - 15:52

I don't think he's shafted them ever.

Then your knowledge of the history of F1 business is not good enough (and to be fair, there is no reason why it should be). In return for signing the Concorde in 98 Bernie promised Frank, Ken and Ron shares in his business if it was to be sold or floated. The name of the holding company on this contract was Formula One Holdings and the lawyers of the three teams did not ensure that it applied to any other entity. Bernie set up a new holding company (called SLEC) to which FOH was transferred. SLEC was then sold and the teams got no stake in it. If that's not shafting them then what is?

The sad thing is that they then took SLEC to arbitration where it was discovered that the lawyers should have framed the contract better. So Williams and McLaren sued the lawyers in 2005 but Williams settled the case when the sap entered into yet another deal with Bernie on the promise of more money. :rolleyes:

#116 Madras

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Posted 21 June 2009 - 15:53

Twilight more interesting? It just means the picture on your TV looks duller. Very interesting...

#117 Ross Stonefeld

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Posted 21 June 2009 - 15:55

Then your knowledge of the history of F1 business is not good enough (and to be fair, there is no reason why it should be). In return for signing the Concorde in 98 Bernie promised Frank, Ken and Ron shares in his business if it was to be sold or floated. The name of the holding company on this contract was Formula One Holdings and the lawyers of the three teams did not ensure that it applied to any other entity. Bernie set up a new holding company (called SLEC) to which FOH was transferred. SLEC was then sold and the teams got no stake in it. If that's not shafting them then what is?

The sad thing is that they then took SLEC to arbitration where it was discovered that the lawyers should have framed the contract better. So Williams and McLaren sued the lawyers in 2005 but Williams settled the case when the sap entered into yet another deal with Bernie on the promise of more money. :rolleyes:



Sounds like Bernie wasn't even clever, it's just that the teams apparently hired trainee solicitors.

#118 kar

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Posted 21 June 2009 - 15:55

I thought twilight Melbourne was a lot more interesting than normal Melbourne and everyone seemed to like Singapore. I don't know what it is about you guys but why does everything have to be so extreme and dramatic?


Are you serious? We could barely see anything in the closing stages of the race and worse, neither could the drivers.

#119 Henrytheeigth

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Posted 21 June 2009 - 15:58

Are you serious? We could barely see anything in the closing stages of the race and worse, neither could the drivers.


Yea the sun in thier eyes was horrible and of course had it been a dark cloudy day then it would of been dangeous even more! Yea bad idea it was imo. Sensible minds need to make sensible decisions.

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#120 HoldenRT

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Posted 21 June 2009 - 16:04

I am glad this topic was made, because if you mention this in the other topics, it will be forgotten about 10 mins later.

James Allen's blog for example, doesn't mention it either. Only when quoting the teams (FOTA's) comments does he mention it. But people here have been discussing it for a long time. It's not that CVC has "suddenly" became the bad guy or boogie man. It's that now is the window of opportunity for the teams as their bargaining power is high. If they sign now, they comprimise this and have to wait until 2012-2013. Now is the time to seek the changes they feel they deserve. Enough is enough in other words.

I don't know if there is any one factor. It seems a combination of all three.

Max - The rules changes, the stewards and team punishments, especially the "if you're buddies with FIA you can get away with more, but if your on the hit list your ****ed" way of doing things. The problem with Max is that he isn't held accountable for any decisions. Any screwups just gives him more license to change it again the next year to "fix" it. Which then gives him further power to stay in power - indefinately. Add to that his methods of negotiating, which are't very nice to say the least. Someone like Max is needed to save the teams from themselves, but a new more democratic and transparent system would be nice. With less threats, blackmailing, changing rules to suit the situation, and airing dirty laundry in public.

2010 regs - 2 tier championship, salary caps. It's what the media focussed on the most, but it's only a small part of the whole picture. It did give the teams an excuse to make some noise though. I can see the arguement against the teams for wanting to out spend rivals, but I believe this only applies to Toyota and Ferrari. The other teams wouldn't be united, if the whole problem was this alone. Why would Ross Brawn want a part of this, if that we true? Budget wise, I would like to see in the breakaway what Max is proposing. Although 40 million is insane. 100-200 seems more reasonable. One good idea alone doesn't solve the problem though. A new championship with high budgets (rather then capped) wouldn't be as good as a series where engineering alone decides the victories, but I see it as a necessary evil in order to get rid of the other problems. The more pressing issues.

Bernie, FOM and CVC - It's hard to say for sure if it's the biggest motivation for the teams, but it has to be up there. And what's frustrating is that it's talked about the least. It's a huge factor in ruining the sport. It's already being talked about but the ticket prices/circuits/internet coverage is a big thing. Bernie even talked bad about the engineers earlier in the year. Engineers make F1 what it is. He cares nothing for the sport, only what money it can provide. Bernie doesn't care who wins the WDC, they just need to be marketable for the PR events. So basically, you have the people who make the sport what it is with the high skill and sharpest minds being short changed, and people who care nothing for it getting all the money (Bernie and CVC). And the fans left in the cold, stomaching a festering feces pie, as Madras said. Maybe the casual fan doesn't realise this, doesn't read the forum topics and only the newspaper headlines. But after a year or two of FOTA championship, they would hopefully see what they have been missing.

The way I see it, the breakaway kills all problems except leadership, which will need to be sorted. It's easy for the teams to be united when against common foes, but on their own it can be choas if they are not careful. This problem seems alot easier to fix, then the other problems though. The teams aren't innocent, they just seem so when in comparison to the other parties.

What I don't understand is Motormedia's position. We all can never agree, fair enough, each to his own. I just don't see the motivation in going against the teams. Bernie and Max, the tag team combo. What do they provide in the way of entertainment? Would you watch a GP weekend, only with these two on the screen? The teams have 10 teams, 20 drivers, thousands of workers back at the factories and fans who tune in to watch them. I can't see the logic in taking these two side over the teams. I don't believe the teams are anything other then refusing to bend over backwards any longer. Unless it's not a case of liking Bernie and Max more, but more a case of hating the teams more. Again, I don't see how you can be a fan of F1 and hate the teams. Why watch? Unless it's hating a specific team like Ferrari. Maybe for some FOTA = Ferrari. I am not a big fan of Ferrari either, but if that's the case, I think you are sadly mistaken. The reasons above outline why all teams are united on this. All 10 of them. Even Williams and Force India agree, only they weren't willing to take the risks and take a hard stance. The weakest links, so to speak. Teams like Redbull and Brawn have nothing to gain by aligning with FOTA, if it was all about FOTA greed and ability to overspend money. They all see very serious need for changes in the sport, even for those with lower budgets.

Some see it all as F1 being destroyed. I see it, as F1 being reborn (hopefully without the cancers). :up: Sorry for the bible sized post. :|

#121 mattorgen

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Posted 21 June 2009 - 16:05

Sounds like Bernie wasn't even clever, it's just that the teams apparently hired trainee solicitors.

They were negotiating directly with Bernie and he clearly was not acting in their financial interests. That is called shafting them.

#122 Madras

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Posted 21 June 2009 - 16:05

Sounds like Bernie wasn't even clever, it's just that the teams apparently hired trainee solicitors.


Yes but do you not see the real point - Bernie was a sneaky, selfish little man. Untrustworthy, basically. And then he sells to CVC for a huge profit, shafting F1 in the process.

Edited by Madras, 21 June 2009 - 16:07.


#123 Ross Stonefeld

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Posted 21 June 2009 - 16:08

Do you guys have any idea how contracts work, or even basic business? Bernie isn't a charity and I actually fairly straightforward to deal with. You just have to be on your toes.

#124 Madras

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Posted 21 June 2009 - 16:11

Do you guys have any idea how contracts work, or even basic business? Bernie isn't a charity and I actually fairly straightforward to deal with. You just have to be on your toes.


I think you have a misconception about business. You seem to think it's about being the most greedy, bastardly arsehole possible. That's not good business, that's just making money at other more trusting people's expence

#125 HoldenRT

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Posted 21 June 2009 - 16:15

They were negotiating directly with Bernie and he clearly was not acting in their financial interests. That is called shafting them.

And the teams have united and are now in a position to fight back.

So who to side with..

The teams acting in their financial interests who provide all of the entertainment, passion and are most people's reason for watching.

Or the "sneaky smart" business man acting in his financial interests, who doesn't show much love for F1 itself or the fans.

Tough choice. :well:

#126 Ross Stonefeld

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Posted 21 June 2009 - 16:15

Uhm, that's what 99% of people doing business are doing. If you don't do that, I recommend you only run a lemonade stand. Trust, but verify.

#127 mattorgen

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Posted 21 June 2009 - 16:16

Do you guys have any idea how contracts work, or even basic business? Bernie isn't a charity and I actually fairly straightforward to deal with. You just have to be on your toes.

Be serious. What would you say if you signed a contract with your employer and subsequently found that your pay stopped because the company had been moved to a company with a different name.

#128 Ross Stonefeld

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Posted 21 June 2009 - 16:19

I'd be pissed. I'd be even more pissed with my idiot lawyer.

#129 mattorgen

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Posted 21 June 2009 - 16:21

I'd be pissed. I'd be even more pissed with my idiot lawyer.

And you wouldn't wonder for one moment why your employer had tried to get out of paying you your salary. If that's true then you're just as bad as Frank.

In a nutshell, it is the very definition of shafting someone - instead of Bernie saying that he would not give the teams their stake he used contractual clauses to avoid it. You may agree with this behaviour but the fact is that it is improper.

Edited by mattorgen, 21 June 2009 - 16:23.


#130 Orin

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Posted 21 June 2009 - 16:24

Uhm, that's what 99% of people doing business are doing. If you don't do that, I recommend you only run a lemonade stand. Trust, but verify.


That's why I love this forum, it's the unique insight from business high-flyers which I value so much.



[And yes, I believe irony can still be conveyed over the internet.]

#131 Ross Stonefeld

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Posted 21 June 2009 - 16:26

I think you guys are in for a hell of a wake-up call if you ever do business at this sort of level.

#132 mattorgen

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Posted 21 June 2009 - 16:27

I think you guys are in for a hell of a wake-up call if you ever do business at this sort of level.

Shafting is common but that doesn't excuse it when Bernie does it.

#133 David M. Kane

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Posted 21 June 2009 - 16:27

I agree with Holden RT. Plus we need to get back to the mood of the '70s that both BE and MM eluded to in their interview with Michael Schmidt

Edited by David M. Kane, 21 June 2009 - 16:30.


#134 Ross Stonefeld

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Posted 21 June 2009 - 16:28

Shafting is a matter of perspective. It's all legal and I can only feel sorry for the teams that they had such poor legal advice, especially knowing ahead of time the sort of person they were dealing with.

#135 mattorgen

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Posted 21 June 2009 - 16:39

Shafting is a matter of perspective. It's all legal and I can only feel sorry for the teams that they had such poor legal advice, especially knowing ahead of time the sort of person they were dealing with.

Bernie's action was clearly deliberate and not accidental so it was evidently done to stop the teams receiving the money (i.e. to shaft the teams). Bernie has been successfully sued by the UK tax authorities for the very same thing (non-payment of tax in this case) so it is a fact that he is prepared to shaft any other tax payer.

Edited by mattorgen, 21 June 2009 - 16:39.


#136 Ross Stonefeld

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Posted 21 June 2009 - 16:41

All companies and high worth individuals try to minimise their taxes, if you step over the line you get clobbered for it. It's not a moral offense.

#137 FonzCam

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Posted 21 June 2009 - 16:44

Do you guys have any idea how contracts work, or even basic business? Bernie isn't a charity and I actually fairly straightforward to deal with. You just have to be on your toes.


That's kind of the point, why should F1 be run as a business? The teams are businesses but their purpose is to race not make money, they get their money from people who want to promote their business (sometimes this is their parent company). Should a sport itself really be run to make a profit for those tasked with its administration? All this has done in F1 is create a conflict of interest between what is good for the sport and what is financially good for the commercial rights holder. So we have new tracks in the middle east and Bernie selling the commercial rights for his own profit whilst dumping the burden of huge debts on the sport. A non-profit FOM would always have put the best interests of the sport and the teams who compete in it first. (we would still have north american races etc)

Your right that Bernie has done nothing wrong and that as a business man he is very competent. The deals he makes for hosting races and tv rights have been great but the problem is that he has seemingly done it all with an eye to filling his own pockets regardless of the impact on the sport.

#138 wide-front-wing

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Posted 21 June 2009 - 16:47

In that sense, a breakaway is probably the only option as CVC own the rights to formula one, the only way to get the rights from them is either to buy them back which would be extraordinarilly expensive, or to remove it's value altogether by forming a breakaway series.


I find it funny that so many people think this is easy to do, or that screwing over CVC is a simple proposition - the sale of the rights was legal - as soon as FOTA announces the new series, given they have openly stated that they want to get rid of CVC - the lawsuits begin.

At issue - FOTA deliberately setting up a rival series to destroy a valid venture capital deal. Once the big capital firms enter the fray - game over. Their lawyers will eat FOTA for lunch.


#139 mattorgen

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Posted 21 June 2009 - 16:47

All companies and high worth individuals try to minimise their taxes, if you step over the line you get clobbered for it. It's not a moral offense.

If someone is prepared to keep money which legally belongs to others then they clearly have no morals. That describes Bernie.

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#140 Apollonius

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Posted 21 June 2009 - 16:51

Do you guys have any idea how contracts work, or even basic business? Bernie isn't a charity and I actually fairly straightforward to deal with. You just have to be on your toes.



Ha!

Contracts exist to be broken. There is always a way out of a contract, there is always a way to manipulate it - that's why lawyers are so highly paid, they find the manipulations.

#141 Ross Stonefeld

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Posted 21 June 2009 - 16:53

If someone is prepared to keep money which legally belongs to others then they clearly have no morals. That describes Bernie.


Apparently the law agrees with Bernie vis a vis CVC and the teams, not with you.

#142 mattorgen

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Posted 21 June 2009 - 17:01

Apparently the law agrees with Bernie vis a vis CVC and the teams, not with you.

I never said otherwise. My point is that Bernie has shafted people financially in the past and this is factually correct. You disputed this but I have demonstrated otherwise.

#143 Ross Stonefeld

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Posted 21 June 2009 - 17:05

I'm saying it's a matter of perspective and ultimately the law is the final arbitrater. That he got sued on taxes by the govt doesn't mean he shafted the teams or anyone else he's worked with. I'm sorry that doesn't fit nicely into your view on all of this, but try your argument in court and see how far it gets you.

#144 mattorgen

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Posted 21 June 2009 - 17:14

I'm saying it's a matter of perspective and ultimately the law is the final arbitrater. That he got sued on taxes by the govt doesn't mean he shafted the teams or anyone else he's worked with. I'm sorry that doesn't fit nicely into your view on all of this, but try your argument in court and see how far it gets you.

You said that you don't think Bernie has shafted the teams ever. This is a false statement. Clearly, the definition of 'shaft' under discussion is number two on the following dictionary link:
http://www.merriam-w...ionary/shaft[2]

"To treat unfairly or harshly."

It is obviously unfair and unreasonable to agree to give the teams shares in his business but then to ensure that this is frustrated through a contract. As I also pointed out, Bernie has kept money which legally belonged to the UK taxman which is legally unfair too. In both a legal and a moral sense, Bernie has shafted people.

Edited by mattorgen, 21 June 2009 - 17:15.


#145 Ligier26

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Posted 21 June 2009 - 18:59

I find it funny that so many people think this is easy to do, or that screwing over CVC is a simple proposition - the sale of the rights was legal - as soon as FOTA announces the new series, given they have openly stated that they want to get rid of CVC - the lawsuits begin.

At issue - FOTA deliberately setting up a rival series to destroy a valid venture capital deal. Once the big capital firms enter the fray - game over. Their lawyers will eat FOTA for lunch.

But FOTA aren't 'deliberately setting up a rival series to destroy a valid venture capital deal'. As has been widely documented, their primary, publicly-stated grievance is that the governing body consistently changes the rules and as a result they are setting up a series with their own, more stable rules (a solution to the dispute that was suggested by the President of said governing body, incidentally).

The CVC deal would be 'collateral damage', undoubtedly, but I was under the impression that the FOTA teams had no contract with FOM because no new Concorde agreement had been signed? The teams are free to come and go as they please, like Honda did, like teams always have, according to whether or not it suits them. Isn't that what Max kept on telling us? Without a binding contract with FOM - and especially when payments have not apparently been forthcoming - why do you think that the existing participants of F1 owe CVC a long-term living? They bought the box office, not the actors. Why weren't Honda sued by the CRH when they left F1, or any other now-defunct team for that matter? Why didn't they sue Schumacher, the star name, for having the audacity to quit 'their' show?

It's not like the FIA F1 World Championship will cease to exist. The grid will be full and the sport will be in rude health... didn't Max keep telling us that too? CVC will own the commercial rights to it, to exploit as they see fit, as is their legal right. If the EU says that the teams can race in whatever open wheel motor racing series they like, on what grounds can anyone sue them if they actually do (possible complications with Ferrari and Red Bull aside)?

I do not believe, by the way, that the collective legal firepower of Toyota, Mercedes-Benz, Renault, Fiat/Ferrari and Red Bull is going to be 'eaten for lunch' by any other legal counsel.

Edited by Ligier26, 21 June 2009 - 21:00.


#146 ray b

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Posted 21 June 2009 - 22:31

I'm saying it's a matter of perspective and ultimately the law is the final arbitrater. That he got sued on taxes by the govt doesn't mean he shafted the teams or anyone else he's worked with. I'm sorry that doesn't fit nicely into your view on all of this, but try your argument in court and see how far it gets you.


B E is a manager of the F 1 show
most manager/agents get 5 to 15% of the take
with the talent get the rest after expences
as the talent are the show
nobody come to see the manager/agents
some how B E , his sub CORPs and the bits he sold off to CVC
are raking off more then 1/2 of the gross take
and have a unequal split of the rest with some [red ] teams getting more
and non points scoring teams very very little

that worked when the sponsors paid the bills
but that is going away fast
and the teams need the funding they earn by putting on the show
to flow back into the sport not go off down a rat hole

so CVC's best hope now is a legit management deal
with a normal % of the income for a manager
the days of 50%++++ are over
if they wake up and see the future
they can get something out of this mess
but I think they are way to greedy
and will go to court and LOOSE everything
as all they real own is a NAME [F-1 GP ]
and the teams just need a new name


#147 Madras

Madras
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Posted 21 June 2009 - 22:35

B E is a manager of the F 1 show
most manager/agents get 5 to 15% of the take
with the talent get the rest after expences
as the talent are the show
nobody come to see the manager/agents
some how B E , his sub CORPs and the bits he sold off to CVC
are raking off more then 1/2 of the gross take
and have a unequal split of the rest with some [red ] teams getting more
and non points scoring teams very very little

that worked when the sponsors paid the bills
but that is going away fast
and the teams need the funding they earn by putting on the show
to flow back into the sport not go off down a rat hole

so CVC's best hope now is a legit management deal
with a normal % of the income for a manager
the days of 50%++++ are over
if they wake up and see the future
they can get something out of this mess
but I think they are way to greedy
and will go to court and LOOSE everything
as all they real own is a NAME [F-1 GP ]
and the teams just need a new name


Problem is CVC need the 50% or they die. That is the problem with CVC. Bernie screwed up, his own personal greed screwed up F1. I think he realises that now, you could see it in his face this weekend.

#148 Captain Tightpants

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Posted 22 June 2009 - 07:03

CVC doesn't exist purely for the purposes of controlling the rights to Formula One. They have other interests the world over, and while a loss of the rights to Formula One would hurt them a little, they wouldn't go under.

#149 Racer Joe

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Posted 22 June 2009 - 07:42

I am always amazed when CVC gets dragged into this kind of dispute because they are a venture capitalist and that they funded their purchase with a loan from RBS.

Let's just rewind back a bit - if Bernie hasn't sold the majority interest in the holding company of F1 commercial rights, he would be the one pocketing the annual profit. Whoever owns it will take the profit. So who owns the commercial rights and how the ownership was funded make no difference whatsover with regards to the popular phrase "sucking money out of F1" if the owner is not the F1 teams themselves. If I am a billiionaire and somehow buys the holding company of F1 commercial rights tomorrow, presuming I am approved by Max and his gang over at the FIA, I would be honouring the deal I have with the teams, give them 50% of the income and pocket the rest less expenses. It has nothing to do with what "service" I provide to F1. This is called capitalism. If I provide capital then I can expect a return if the business is successful even if I contribute nothing else.

What the teams should have done was to hold the commerical rights themselves but of course up until possibly now they have never united and be organised enough to do anything as one body - which is why they have been exploited for years by Bernie and Max. The F1 teams should have received a lot more of the revenue for a very long time. It was only 10 years ago when they got like 23% - a completely ridiculous situation but they allowed it because they were so divided and competitive with each other. A 10 million loan from Bernie would shut a lot of team owners up for quite a while.

#150 kar

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Posted 22 June 2009 - 07:57

I am always amazed when CVC gets dragged into this kind of dispute because they are a venture capitalist and that they funded their purchase with a loan from RBS.

Let's just rewind back a bit - if Bernie hasn't sold the majority interest in the holding company of F1 commercial rights, he would be the one pocketing the annual profit. Whoever owns it will take the profit. So who owns the commercial rights and how the ownership was funded make no difference whatsover with regards to the popular phrase "sucking money out of F1" if the owner is not the F1 teams themselves. If I am a billiionaire and somehow buys the holding company of F1 commercial rights tomorrow, presuming I am approved by Max and his gang over at the FIA, I would be honouring the deal I have with the teams, give them 50% of the income and pocket the rest less expenses. It has nothing to do with what "service" I provide to F1. This is called capitalism. If I provide capital then I can expect a return if the business is successful even if I contribute nothing else.

What the teams should have done was to hold the commerical rights themselves but of course up until possibly now they have never united and be organised enough to do anything as one body - which is why they have been exploited for years by Bernie and Max. The F1 teams should have received a lot more of the revenue for a very long time. It was only 10 years ago when they got like 23% - a completely ridiculous situation but they allowed it because they were so divided and competitive with each other. A 10 million loan from Bernie would shut a lot of team owners up for quite a while.


No one is blaming CVC for being greedy, cynical capitalists. People just understand that such capitalists do not make decisions for the long term good. They make decisions purely on maximising their investment as quickly as possible.

And as fans of the sport, not of pinstriped tools making money, many of us feel we and the sport would be better off if CVC were excised from this picture, and the commercial rights administered by people directly invested in seeing the long term health of the sport.