64 replies to this topic

[Spillage]

I really think it'd be a bad thing if the sport were to be owned by a minority of the competitors. And I have a nasty image of Bernie running it all from a prison cell, like John Gotti.

 

Agree with posters above that the FIA should just own all commercial rights. Teams, tracks, fans; Bernie is bleeding them dry.

[New Britain]

metz,

 

"Since when is borrowed money not part of an investment?"

 

Since forever, or, strictly speaking, since limited company and limited liability partnership structures were invented. Indeed, the whole point of "limited" structures is to reduce the liability borne by the limiting party.

 

With limited structures, borrowed money is part of the investment, but part of the lender's investment, not part of the borrower's investment. In the case of the F1 Commercial Rights Holder, a special-purpose, limited liability creature owned (mostly) by CVC was the borrower.

 

Wrt your example of a mortgage on a house, in almost all cases the borrower is an individual person, not a limited entity. If the borrower were a special-purpose limited company, I can assure you that the interest rate would be higher than normal.

 

To look at it another way, the interest rate that the Commercial Rights Holder has had to pay has been quite steep - IIRC originally it was IRO 9-10%. Yet the ultimate owners, CVC's private investors, have a collective net worth in the hundreds of billions if not in the trillions. If the investors themselves were on the hook for the LLP's debt, the interest rate they would have had to pay would have been much lower, as the risk of a default would have been exceedingly small.

 

As regards your question of how this latest mooted effort to woo the 3 teams to buy stacks up against last year's plan to go public, would the key difference not be that, in a public flotation, Bernie would have been a seller (in effect, if not in fact), whereas in the latest mooted effort he would be a buyer??

 

It seems highly likely that, once the German court action has run its course, CVC is going to kiss Bernie "Goodbye", either by politely sacking him or by selling control to someone who will politely inform him that his services are no longer needed. If Bernie is part of the new group running the show, however, he won't sack himself.

 

This would be nothing more than a reprise of the stunt he pulled when he steered the purchase to CVC 9 years ago.

Edited by New Britain, 06 April 2014 - 03:06.

[metz]

Or. if we are lucky, Bernie will get to spend some time with his friend Gerhard Gribkowsky.

[New Britain]

I really think it'd be a bad thing if the sport were to be owned by a minority of the competitors. And I have a nasty image of Bernie running it all from a prison cell, like John Gotti.

 

Agree with posters above that the FIA should just own all commercial rights. Teams, tracks, fans; Bernie is bleeding them dry.

 

Yes, that would be good, but only if honest people were running the FIA.

 

The EU Competition Commissioner at the time its investigation of F1 was underway, Karel Van Miert, was quoted as saying that the way that the FIA influenced motor sport as it related to F1 was "the worst example of conflict of interest" that he had ever seen. This was why his organisation interceded.

 

The FIA were found to have strong-armed racing circuits into denying races to racing series that might compete too directly with F1, by refusing sanctions for the competing races.

 

Unfortunately, before the Competition Commission had reached an agreement with the FIA, Van Miert left office and was replaced by lifelong motor racing and Ferrari fan Mario Monti, who cut a deal with Mosley that observers at the time thought was shockingly lenient, and far more lenient than what Van Miert was expected to demand.

 

One of the features of this deal was that the FIA would sever its commercial link to F1 by selling the commercial rights to Bernie for 100 years - a classic example of Mosley's genius for perverting and exploiting circumstances in which he was in the wrong and should have been the loser into a big personal win. Outrageous and mind-boggling, yet innocent Max made out like he had no choice - how else, he asked plaintively, could he comply with the wishes of the draconian EU?

 

Today, there is no chance of the FIA's gaining commercial control. Even if they were to secure EU permission, they wouldn't have the money.

[Hans V]

Isn't it long overdue now that the FIA steps in and cancels the 100-year marketing rights deal - and get rid of both CVC and Bernie (he's gotten way too much credit for essentially robbing the sport blind by his divide-and-conquer-tactics)? There's got be som out-clauses in this agreement.

Edited by Hans V, 06 April 2014 - 08:58.

[jimbox01]

Feb 2014 - Liberty Global in discussions with CVC about buying their stake in F1, Bernie says it's a bad idea.
http://www.ft.com/cm...l#axzz2y5wDwjSc

March 2014 - Bernie says he'll sell his shares if CVC sell their.
http://www.telegraph...s-with-CVC.html

April 2014 - current rumour emerges...

A. Someone is trying to bump up the value of their shares with a ficticious 2nd potential buyer.
OR
B. Bernie wants to get control back and this is the only way he can do it.
OR
C. Something else - who knows!

[blackgerby]

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...

If Bernie and Ferrari get to be totally in charge, those teams will totally disappear. This is Bernie "I'm not sharing anything with an eleventh team" Ecclestone, and Ferrari "only we should be winning". At least with CVC they get to have the chance to be on the grid.

[OSX]

Well, if the modern eco-friendly racing alone won't keep the sport in the headlines then a proper old school conflict will.

[skid solo]

Does Bernie read these forums? I haven't seen this much positivity about a set of regulations in a long time. If I could be bothered I would get everyone to sign a petition and send it to him! 

[aditya-now]

Does Bernie read these forums? I haven't seen this much positivity about a set of regulations in a long time. If I could be bothered I would get everyone to sign a petition and send it to him! 

 

Joe Saward and Toto Wolff are expressing it the best

 

http://joesaward.wor...p-of-the-flops/

 

http://www.bbc.com/s...rmula1/26907454

 

That is the reality - the rest is politics...

[aditya-now]

Bernie just declined in the Martin Brundle interview on Sky any truth to the consortium buy out story - three no's.

[Lazy]

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.

 

Incredible how he has managed to amass $4.2 billion then. Surely nothing underhand going on?

 

http://www.forbes.co...ard-ecclestone/

 

His daughter is worth $300 million ffs, he'd struggle to do that with the figures you're talking about.

[Lazy]

http://www.auto-moto...er-8292550.html

 

We might have to get organised, if that comes true the sport would become WWF1.

 

Anyone got Martin Whitmarsh's number? His sacking is starting to look less and less like a coincidence.

[Fastcake]

Bernie just declined in the Martin Brundle interview on Sky any truth to the consortium buy out story - three no's.

 

So Bernie is trying to organise it then

[Slartibartfast]

Bernie just declined in the Martin Brundle interview on Sky any truth to the consortium buy out story - three no's.

…and then he heard the cock crow.