Is F1 for sale? Bernie says no

Bernie Ecclestone says Formula One is not for sale and my question is: how does he know?

For starters, everything in the world is for sale — if the price is right.

Second, there are now so many layers of ownership of F1 that a potential buyer could be talking to someone in one layer and the other layers might not know about it.

Translation: F1 is owned by the private equity firm CVC Capital Partners Ltd., which bought most of SLEC (a holding company) from Ecclestone back in 2006.

Third, although Ecclestone still has enormous influence, he's an employee of CVC these days and might not be entirely in the loop on something like this.

So, layers.

The news broke last night (Tuesday) that News Corp., Rupert Murdoch’s media conglomorate, is in talks to purchase F1 with the help of partners. The stages of the talks were described as “embryonic.”

(So, some guy from Murdoch’s office calls some guy at CVC and says, “We’d like to talk to you about maybe buying Formula One,” and the CVC guy says, “Oh, okay.” Now, that's  “embryonic.”)

In any event, Formula One racing — after the Olympics (only held every two years) and the World Cup of football/soccer (every four years) — is the world’s most-watched and followed sport. So it only follows that a corporation that has holdings in television, newspapers, radio and the Internet might be interested in its content.

But Bernie says no. “Total rubbish,” he told Britain’s Telegraph Sport.

We’ll see.

P.S. It was reported today that F1 owner CVC recorded losses of $660 million last year on costs associated with a $2.5 billion loan the firm took out to pay for the acquisition of Formula One.

Comments

[APP]

Norris, Norris...Norris. What are we going to do with you? Bernie possibly not in the loop? Bernie is THE LOOP. He created a denial because nothing was happening....to get something going. If you google 'bernie ecclestone quotes phrases denial' you get different sites with all his quotes over the years. Some hilarious stuff. There is also an indication of a denial of Bernie over the Max Mosley situation but it does hint at who was really behind it. Hint: he owned a back marker F1 team at one time who today exist in F1 other another name.

[DJL]

Ten years ago, German pay-TV mogul Leo Kirch bought the companies that controlled the "commercial rights" for the same reason that News Corp is apparently considering it: he wanted to feed motor racing rights exclusively to his premiere pay-TV channels. The German anti-trust regulator told Kirch he could buy F1, but he could not feed F1 direct to his pay-TV channels. I doubt the Eu anti-trust regulators will have changed their mind on the matter and they'd likely have to approve any purchase. However if they did, I think the FOTA and FIA would have some serious concerns. Right now the team's sponsors get wide exposure via F1 tv broadcasts. But if the races moved to premiere channels, the ratings would drop, and so would the amount of money sponsors would be willing to pay. And then there's the money the teams get from TV income.

Right now, CVC pays the FIA and the teams a share of TV income. Right now, it's in the best interest of the FIA, the teams and CVC for CVC's F1 companies to charge broadcasters as much as the market will bare. But if News Corp buys the companies that hold the "commercial rights", I'm sure both the teams and the FIA (and anybody else with half a brain) could imagine a situation where News Corp might feel it was in their best interests to give their own TV networks a low cost deal on the broadcast rights (that kind of nonsense already happens in the movie and tv business and results in plenty of legal troubles). Needless to say that will worry the teams and the FIA.

I'm pretty certain that the FIA and the FOTA aren't going to allow anything that could negatively impact TV income or the ability of the teams to raise money via sponsorship. So while News Corp might be interested, but I doubt it will happen.