64 replies to this topic

[Gilles4Ever]

There’s a hot rumour doing the rounds at the moment that Bernie Ecclestone is trying to put together a consortium to buy a significant chunk of F1 – and that Red Bull, Ferrari and potentially Mercedes could be part of that group. It’s unsubstantiated but let’s just go with it for a moment.

 

http://www.motorspor...fF5AemU.twitter

[SGWilko]

Hopefully they will shoot Bernie once the ink dries.......

[Ellios]

They couldn't make FOTA work but now it's Ferrari, Red Bull and Mercedes going with Bernie.... lots to play out on this one...

[Nicktendo86]

Interesting, wish he would just bugger off now though. You've done a lot for the sport in the past Bernie but you are old and out of touch now, just leave it alone for goodness sake.

[Fastcake]

What, Bernie had another reason behind dismissing the new engines? I am shocked

I am rather concerned over the potential the commercial rights will end up partially owned by a minority of competitors. Surely that would end up being scrutinised by the EU?

Edited by Fastcake, 04 April 2014 - 10:38.

[ReeVe]

What, Bernie had another reason behind dismissing the new engines? I am shocked

I am rather concerned over the potential the commercial rights will end up partially owned by a minority of competitors. Surely that would end up being scrutinised by the EU?

 

I 'd rather Ferrari, Merc and RB along with Bernie own F1 than a faceless nameless odorless private equity fund

[sheepgobba]

I 'd rather Ferrari, Merc and RB along with Bernie own F1 than a faceless nameless odorless private equity fund

 

Seconded. Rather have the actual stakeholders that are directly involved. 

[DampMongoose]

Great, maybe it will be Bernie's last chance to introduce short-cuts, sprinklers, grids by ballot and medals.  It might even give him the opportunity to ditch the 3rd World European events too as I believe this year is when he predicted that would be the case...

[swerved]

Ted has just said that there's a meeting at the track tomorrow., between Bernie, Luca, and Todt, he said if he were Mercedes he'd be wondering if his invite had been lost in the post.

[Lazy]

Oh ****, Bernie , RB and Ferrari are the last people we want running F1.

[Jazza]

So the 3 parties (Ferrari, RedBull, Bernie) that get the biggest cut of F1 profits each year (for no other reason other than that they do) are now going to take their extra money and buy the rest of the sport.

Seems fair...

[metz]

It's the best way to protect the status quo.

 

If the teams are going to own it, it must be ALL the teams, as it is in every major sport.

And what is this...Bernie selling F1 for the 4th time? What a salesman!

[scheivlak]

I was wondering why he was suddenly so critical of his own show.

 

Now it makes some sense: he wants to buy it cheap 

[Boing 2]

I 'd rather Ferrari, Merc and RB along with Bernie own F1 than a faceless nameless odorless private equity fund

 

 

Oh they're not odourless, it's quite a pungent smell in fact.

[metz]

I disagree.

The current owners have NOT interfered with the running of the show.

The opposite of what we can expect with the new prospective owners.

[PNSD]

Ted has just said that there's a meeting at the track tomorrow., between Bernie, Luca, and Todt, he said if he were Mercedes he'd be wondering if his invite had been lost in the post.

 

That's about noise. It was bought up a while ago. Wasn't there an article on it ?

[jjcale]

Sooo ... despite everything else going on .... it seems that CVC may actually exit F1 before Bernie after all

[jjcale]

I was wondering why he was suddenly so critical of his own show.

 

Now it makes some sense: he wants to buy it cheap 

 

 

Stop it!

 

Next you will be accusing SV of being in on the plot 

[RealRacing]

The worst thing that can happen to a sport is to be owned by only some, and the most powerful, of its participants. In any case, any independent third party owning it is better than an involved party(ies) owning it. Bernie and CVC have not been doing a great job lately, but remember the teams are also stakeholders and also partly to blame. As said in a previous post, if you look at the respective interests of Bernie and the teams, who do you think has a higher motivation to make F1 a better show vs a glorifies test bed?

[jjcale]

It's the best way to protect the status quo.

 

If the teams are going to own it, it must be ALL the teams, as it is in every major sport.

And what is this...Bernie selling F1 for the 4th time? What a salesman!

 

Would you want the guys from Lotus owning a piece of F1??

[johnmhinds]

So Bernie wants them to group together to help him buy out all the CVC shares?

 

Why would they do that?

[tomisumi]

Would you want the guys from Lotus owning a piece of F1??

 

Mansoor? Are you there?

[metz]

Would you want the guys from Lotus owning a piece of F1??

Of course.

They would have 1/12 of it.

They have some influence even now.

As long as they don't pay for it with the cheque that's still coming in the mail.

[Atreiu]

I wouldn't want to be Force India or Lotus in that group.

[metz]

I wouldn't want to be Force India or Lotus in that group.

Better to be included than excluded.

 

Of course it's all academic. Other than the top 3, nobody has the money.

[JHSingo]

I disagree.

The current owners have NOT interfered with the running of the show.

The opposite of what we can expect with the new prospective owners.

 

No, but they have sucked mega millions out of the sport. Money that could have gone to those teams currently struggling to survive instead.

 

Don't want pay drivers in F1? Well, CVC is basically the cause of that little problem...

Edited by JHSingo, 04 April 2014 - 14:11.

[metz]

Can't agree at all.

At this point CVC has put more money in than taken out. Money they take, which is a huge amount, is only the interest of what they put in.

The problem is the debt load, which anyone that buys this will have.

If you want financially healthier teams, the solution is simple. Distribute the TV money evenly. Like most sports.

As long as the teams with money get rewarded with more money, the series can not be competitive.

And if the rich teams own the whole show there is no hope in hell for the mid or back teams to improve.

Edited by metz, 04 April 2014 - 14:39.

[Boing 2]

What money have they invested in the sport?

[metz]

About $10 Billion, at one time, if this year's expected float is to be believed.

[jonpollak]

LOVE LOVE LOVE Mark Hughes insight on this.

The more WE bitch about the sound, the lower it drives down the value of F1...then..It's a cheaper buy!!!!

Mark wondered out loud if a certain drivers comments were prompted by his shortness!!

 

Jp

[Anders Torp]

At this point CVC has put more money in than taken out. Money they take, which is a huge amount, is only the interest of what they put in.

 

 

About $10 Billion, at one time, if this year's expected float is to be believed.

 

Wow. That is very different to what I have seen reported. Do you have a source for any of that?

[New Britain]

Wow. That is very different to what I have seen reported. Do you have a source for any of that?

 

No, Anders, you are correct. With no disrespect to metz, CVC have not put anything remotely like $10b into F1.

 

I have not looked at the numbers in ages, and have seen many different versions (although the ones that came out in the recent High Court case are going to have been accurate), but very, very roughly:

 

- CVC bought something like 70% of the Commercial Rights-owning company for something like $1.2b

- Most of the $1.2b was not CVC's own money, but rather money that they borrowed from banks, akin to a mortgage. If I had to bet, I'd bet that CVC put up IRO $300m in equity. The reason that Delta Topco (or whatever this week they're calling the company that currently owns the commercial rights) has such relatively high interest expense each year is that they borrowed so much, and put up so little of their own money, to finance the original purchase.

- That $300m, or whatever, was as far as I know the only money that CVC have ever put into the property.

- CVC have already paid themselves (and the other equity holders) at least one massive dividend. I do not recall exactly how much it was, but certainly it was in the hundreds of millions.

- Maybe a year ago CVC sold off a large chunk of their original ownership % at an enormous profit, although they still control the entity.

 

The only way that the number $10b could be put in the discussion is that, if a portion of the equity were floated on the Singapore Stock Exchange or some other venue with minimal listing and reporting requirements, the implied value of all the equity could, potentially, have a market value of $10b. CVC have not put in anything like $1b of their own money, let alone 10!

 

 

Much is made of the vast sums that Bernie and CVC have sucked out of the sport, which is true, but people seem to think that, because they have made themselves rich(er), they have been brilliant business people.

If one looks, however, not at what they have done but at what they might have done, one can see that their results have been mediocre, assisted by more than a little luck and artful practice.

 

As a measure of how poorly they have developed the sport, did you know that F1 - supposedly "the most watched" sport" in the world each year - generates less annual TV revenue than Turkish Super Lig Football does? So much for "the most watched sport".

[jjcale]

 

I was wondering why he was suddenly so critical of his own show.

 

Now it makes some sense: he wants to buy it cheap  

 

 

Stop it!

 

Next you will be accusing SV of being in on the plot 

 

 

LOVE LOVE LOVE Mark Hughes insight on this.

The more WE bitch about the sound, the lower it drives down the value of F1...then..It's a cheaper buy!!!!

Mark wondered out loud if a certain drivers comments were prompted by his shortness!!

 

Jp

 

 

Good grief

 

... as theories go this one does not make sense.... valuation will not be based on short term perceptions. CVC aint dumb ... and they can shut down anyone who persistently bad mouths their asset.... and Bernie has bigger problems to deal with .... and its a fact that the sound is not as good. No need for a theory as to why folks would tell the truth

Edited by jjcale, 05 April 2014 - 08:29.

[Watkins74]

Love Bernie or hate him but I hope I am still so sharp and active at 83.

 

My last big deal was convincing my wife to go to Mexican instead of Chinese on our Friday night date night. 

[metz]

I thought I made it clear that the $10 billion refers to the expected float this year. Wicki is the source.

Hard to say exactly what they invested due to the buy and sell activity, and we don't know what other expenses they had.

But it is in the BILLIONS and at this point have invested more than anyone else.

[Boing 2]

By invested though you really mean "put into Bernie's back pocket", they haven't actively pumped funding into F1 in any way that I'm aware of.

[metz]

LOL

Yes There seems to be no way to avoid Bernie's pocket.

Applies to you and me as well.

[Anders Torp]

Hard to say exactly what they invested due to the buy and sell activity, and we don't know what other expenses they had.
But it is in the BILLIONS and at this point have invested more than anyone else.

No source, eh? Then how do you know it's in the BILLIONS?

[Mohican]

"Commercial rights holder"...?

IOC owns the Olympic Games.
FIFA owns the World Cup.
UEFA owns the Champions League.
IAAF owns the athletics world championship.
You get my drift...can go on about golf, tennis, ice hockey, sailing, rugby, etc.

Bernie "convinces" Max Mosley to sell FIA's rights - for a 100 year duration. How can Mosley possibly have survived as head of the FIA after that ? In fact, why are not both of them in jail for embezzlement or something ?

The race organisers have to pay multimillion dollar "fees" to "host" the race - and get to keep ticket receipts, but everything else goes to Bernie in one way or another; TV money, trackside advertising, the Paddock Club, the "official champagne", everything. How anybody can argue in favour of keeping this man on, in any position, is beyond me.

[ollebompa]

FIA should own the commercial rights. Thats the only way to minimize politics in F1.

[krobinson]

Bernie "convinces" Max Mosley to sell FIA's rights - for a 100 year duration. How can Mosley possibly have survived as head of the FIA after that ? In fact, why are not both of them in jail for embezzlement or something ?

The race organisers have to pay multimillion dollar "fees" to "host" the race - and get to keep ticket receipts, but everything else goes to Bernie in one way or another; TV money, trackside advertising, the Paddock Club, the "official champagne", everything. How anybody can argue in favour of keeping this man on, in any position, is beyond me.

 

Absolutely my thoughts. The part of how Mosley and Ecclestone were not investigated after that 100 year deal is just mind-blowing.

 

The less Ecclestone f1 has, the better off it will be.

[itsademo]

The race organisers have to pay multimillion dollar "fees" to "host" the race - and get to keep ticket receipts, but everything else goes to Bernie in one way or another; TV money, trackside advertising, the Paddock Club, the "official champagne", everything. How anybody can argue in favour of keeping this man on, in any position, is beyond me.

 

sorry but you are badly misinformed if you think everything goes to Bernie in any way shape of form.

firstly there are the freight costs, the costs of producing the F1 video stream, the cut the fia and cvc take and lets not forget also the the 50% or so that the teams take.

So its just completely wrong to even try to claim Bernie gets it all I would put money on Ferrari and RBR getting far more than Bernie ever sees.

[pdac]

So, as question marks appear over CVC retaining Bernie as a result of the charges brought against him, all of a sudden Bernie wants to buy back in. Hmmm.

[Mohican]

sorry but you are badly misinformed if you think everything goes to Bernie in any way shape of form.
firstly there are the freight costs, the costs of producing the F1 video stream, the cut the fia and cvc take and lets not forget also the the 50% or so that the teams take.
So its just completely wrong to even try to claim Bernie gets it all I would put money on Ferrari and RBR getting far more than Bernie ever sees.

I do not think that I am misinformed, but neither did I claim that revenue and profit are the same thing; of course there are costs involved.
But this was not my point at all. Rather, why did the FIA have to sell the commercial rights at all, in the first place ? This has never been explaines, and I think that Bernie and Max just used the situation and that everybody else in the FIA at the time was either an idiot or bought off.

Was Max just power mad (presumably he and Bernie did a deal that he would have free rein at the FIA), or did he have a financial interest as well ? Neither of them would have lasted a week in management of a normal company, and rightly so.

[metz]

No source, eh? Then how do you know it's in the BILLIONS?

I gave you the source.

If you had quoted my complete post it would have smacked you in the face.

Wicki is your friend. Just try "CVC F1 investment" and you will find all kinds of others.

[Anders Torp]

I gave you the source.
If you had quoted my complete post it would have smacked you in the face.
Wicki is your friend. Just try "CVC F1 investment" and you will find all kinds of others.

"Wicki" is the best you can come up with? Then don't bother.

[itsademo]

I do not think that I am misinformed, but neither did I claim that revenue and profit are the same thing; of course there are costs involved.
But this was not my point at all. Rather, why did the FIA have to sell the commercial rights at all, in the first place ? This has never been explaines, and I think that Bernie and Max just used the situation and that everybody else in the FIA at the time was either an idiot or bought off.

Was Max just power mad (presumably he and Bernie did a deal that he would have free rein at the FIA), or did he have a financial interest as well ? Neither of them would have lasted a week in management of a normal company, and rightly so.

 

sorry but even a quick search of the web will show you clearly are misinformed.

just check the percentage the teams take over £700M which is OVER 50% of the TURNOVER not profits so is a far greater share than the teams would like to admit or some fans it seams.

CVC made a profit of £87M from F1 in the same year

Almost all companies would expect greater returns from a company valued in the billions.

Bernie in the first five years of the deal made £25M from his shares and was paid £19M

So he earned IRO £9M a year certainly not an insignificant wage but certainly not outlandish when compared to other chief execs of billion dollar companies.

and most clearly not most or as much as even the smallest team gets which is £10M even if they failed to finish any race in a season. If you remove the shares from his income then he has been paid under £4m a year far less than other execs are given and less than many f1 drivers earn.

 

many companies sell the rights to products to other companies mainly because they lack the funding or expertise to enable the product to be fully realised and in sport its no different the FIA IMHO lacked the economic power to enable the sport to grow which everyone admits it has massively since cvc took over the rights

And don't forget in 90 odd years the FIA get back a much more valuable series than when they sold it.

[New Britain]

FIA should own the commercial rights. Thats the only way to minimize politics in F1.

 

They are not allowed to own the commercial rights, because they had so abused their position as part-beneficiary of the commercial rights that the European Union Competition Commissioner forced the FIA to sever its commercial connection to the rights. This was also why the FIA Foundation was created - to separate the F1 revenue stream from the governing body.

[New Britain]

I thought I made it clear that the $10 billion refers to the expected float this year. Wicki is the source.

Hard to say exactly what they invested due to the buy and sell activity, and we don't know what other expenses they had.

But it is in the BILLIONS and at this point have invested more than anyone else.

 

I'm not sure where you got that idea, but it is incorrect.

 

We know that CVC's gross purchase price - and please recall that they did not buy 100% of the equity, but more like 70% of it, with other %s for Bernie, his associates, Lehman, etc - was IRO $1.2b.CVC's purchase was mostly funded by debt - someone else's money, not CVC's. These facts take the original CVC investment down to something very much smaller than £1 billion.

 

Since then, AFAIK, neither CVC nor anyone else has put a penny into the Commercial Rights holder in any single year. IINM, in every year the Commercial Rights holders have turned a profit, after interest payments. There is no question that, on a net basis, CVC have extracted a great deal of money from F1 since they gained control less than a decade ago.

 

Insofar as CVC have now pared their stake back to about 37%, and of course been paid for the slices that they have sold since their original purchase, it would not be correct to say that, today, they have more invested in F1 than anyone else. As of today, having extracted more than they have put in, CVC's net investment is a negative number. Waddell & Reed have invested the most, as of today.

[metz]

Since when is borrowed money not part of an investment?

I hope you don't have a mortgage on your house.

But you are correct that the ownership is not what it once was and I stand corrected on the initial amount. I forgot about the write-off that the German banks took.

 

Getting back to this thread however, I would like to know how this latest effort to woo the 3 top teams stacks up with last year's plan to go public in 2014?