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F1 – For sale or not for sale?
Posted By: James Allen  |  04 May 2011   |  7:27 pm GMT  |  99 comments

The last 24 hours have seen some interesting twists in the story of a possible takeover of Formula 1 by News Corporation.

Last night we had a joint statement from News Corp and Exor, the Agnelli family company which owns a stake in FIAT and Ferrari, saying that they were “in the early stages of exploring the possibility of creating a consortium with a view to formulating a long-term plan for the development of Formula One in the interests of the participants and the fans.”

(Photo: Darren Heath)


They added, “Over the coming weeks and months, Exor and News Corporation will approach potential minority partners and key stakeholders in the sport. There can be no certainty that this will lead to an approach to Formula One’s current owners.”

This afternoon CVC, which owns 75% of the company which holds the commercial rights to F1, responded respectfully, but firmly, “CVC recently received an approach from the Exor/News Corporation consortium. James Murdoch has informed us the approach is friendly, at a very preliminary stage, and they acknowledge Formula One is privately owned by CVC and not currently for sale.

“CVC recognises the quality of Exor and News Corporation as potential investors, but any investment in Formula One will require CVC’s agreement and will need to demonstrate that it is in the interest of the sport and its stakeholders, taken as a whole.”

It will also require the FIA’s approval under the famous “Don King” clause and FIA president Jean Todt has indicated recently that he’s looking for a better financial deal from the rights to Formula 1, which the FIA has contracted to FOM.

This story is evolving quite quickly, but there are a few points to make at this stage. First it sounds, from what I hear behind the scenes, as though the possibility of a deal is increasing.

But is it just the Murdoch’s and the Agnellis who are in this consortium or will there be funding from elsewhere?

With the historic links behind the scenes, Ferrari president Luca di Montezemolo is clearly very involved in the News Corp/Exor consortium. But one wonders whether there is another partner quietly behind the scenes too, such as Abu Dhabi? Ecclestone came out with a curious quote yesterday where he said that although Abu Dhabi was supposedly interested in F1, he had heard nothing from them. Some think that the News Corp story is a ruse designed to flush out other interested parties, but what if Abu Dhabi was part of this consortium?

There are strong links with Ferrari and Mercedes, both of whom have been linked with this initiative and strong links with the Murdochs on many business levels.

Also there is the financial side, remember that News Corp is poised to take control of BSKYB, a deal which will cost in the region of £9 billion, if it goes through.

Normally they tend to like to act alone, without other partners who might tell them what to do, so the consortium here is an interesting step.

Another point worth bearing in mind is that when they bid for something the Murdochs tend to go for the “killer blow” offer, one that puts the deal beyond the reach of rivals, as they did with Dow Jones and the Wall Street Journal recently.

As to why this is all happening now, there are two reasons from F1′s point of view. First, the 100 year agreement between FIA and FOM only came into force at the start of this year, so the rights are now in place for 100 years and as Jean Todt said recently, the deal is legally watertight and cannot be unpicked. Getting to this point, after all the breakaway talk in 2009, was important for CVC from an onward sale point of view.

Also the negotiations for the 2013 Concorde Agreement are getting underway now and after the end of 2012 everything is to play for.

An alliance with a media giant like News Corp presents other possibilities for the teams, led by Ferrari, were they to stay together. A major problem faced by any breakaway series is getting credible and lucrative TV deals together, so joining forces with a company which controls SKY in UK, Germany and Italy as well as Fox Sports in the Americas, Middle East and Australia and Star TV in Asia, presents a very strong hand.

So maybe this is a giant poker chip being played by Ferrari as the Concorde negotiations begin. CVC will not want to be left with 100 years of nothing.

Analysts are saying that the value of sports rights is set to increase in the future, driven by the way sport fits into people’s leisure time and also the multiplicity of new platforms for consuming sports coverage, like mobiles and the internet.

A bold company, which believes it can find the way to maximise those new media revenue streams is likely to see enormous potential in F1. Exor, which is run by 35 year old John Elkann and 38 year old James Murdoch may fancy that challenge.

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99 Comments
  1. DonDahlmann says:

    Luca di Montezemolo is also my suggestion as a keyplayer.

    You will find this article interesting. http://blogs.news.sky.com/kleinman/Post:5230b1dc-0985-45b0-bf1b-67799248a51e

    Seems, that there are some movements to get rid of Bernie. Question is: What will the FIA do?

    1. jonrob says:

      This is really playing right into Bernie’s hands. He always tries (and usually succeeds) to divide and rule in any negotiation, and in particular with the Concorde Agreement. Here, the teams, at least four of them, are doing that job for him, so forget any better distribution of money to the teams for the next Concorde, unless all FOTA members are invited to Stuttgart, they will have shown a potential rift; or at very least the notion that some teams are more equal than others.

      1. wayne says:

        I don’t think it plays into Bernies hands at all this time.

        The timing is a tad ‘convenient’ isn’t it! It almost allows the teams to say to CVC “give us a much bigger slice of the pie or we go and play with Murdoch and you own the rights to 100 years of z list teams racing about deserted tracks.”

        It’s win win for Fiat/Ferrari isn’t it? Have Bernie and CVC finally been outmanoeuvred once and for all? Is this check-mate? I am no fan of Bernie of late but I do hope his career does not end with humiliation after all he has done for the sport (although his vast fortune will be something of a crutch to lean on) – the ultimate wheeler dealer businessman being convincingly out wheeled and dealed…..

        Would I rather Bernie or Murdoch? Good grief now that is a hard question! Better the devil you know hat’s for sure in this case! Surely News Corp’s bid for world domination has to be reigned in at some point by a government with a bit of backbone?

      2. Damian J says:

        New blood required to replace Bernie. No room for sentiment here.

        Berni has been ruthless enough over the years and I’m not sure he has done too many favours to British racing teams or to the British F1 fans so I won’t be urging the Queen to give him a knighthood!

      3. Tim. says:

        Live by the sword and die by the sword….Bernie has welded it a lot.

  2. Fran says:

    Better the devil you know than the devil you don’t.

    1. Jodum5 says:

      Not in Bernie’s case. He’s past his sell by date by a few years now.

    2. seisteve says:

      I agree, I think Bernie has got F1 where it is at the limit of his expertise and age.

      I respect this guy immensely for what he has done but I would expect that he knows he doesn’t want to to part of any new partnership and I hope he retires on a high.

    3. jonrob says:

      As an old git myself, I agree. I fear that I could not continue to be an armchair fan if I had to pay extra on top of the bbc license fee.
      The days are long gone when I could afford to actually go to a GP.

      I think this story has a very long way to run. In theory a buyer needs only 38% to control the whole thing, if that 38% of the total is bought from CVC. The minority shareholders combined have just less than 38%. This would then leave CVC as the largest minority holder should they decide to hang on to a portion, but may make enough to pay off the loan.

      However I am sure that if Bernie decides to fight, he will win, he is very cunning and master of his barrel of eels.

    4. jonrob says:

      To add a bit on here to my last post:
      I think it is very little appreciated how big an organising job Bernie and his companies do for the sport, in negotiating venues and revenue streams and in the huge logistical/transport operations which he provides for the teams.

      I am not going to list all the jobs because I am bound to leave half a dozen out.

      True his political blinkers have now been extended to humanitarian ones and he need to provide team security for all in Brazil, but he is still the better devil.

  3. A breakaway led by Ferrari, McLaren and others would appear to be the only way to put an end to the huge amount of money being sucked out of the sport by CVC.

    Trouble is, from the fan’s point of view, especially in the UK, the possibility of a reduction in ticket prices at Silverstone is nowhere near enough to offset the deterioration in TV coverage of the remaining 19 races if the TV rights go to a Sky subscription channel or a free to air channel with lots of advertising breaks.

    This would be infinitely worse than the current superb offering from the BBC.

    Given that kind of stark choice, I would reluctantly prefer the current arrangement to continue.

  4. Phil says:

    A sale to this group would be a disaster. Any deal involving News Corp will be of benefit to News Corp first and foremost; the fans will have no say in any sale and will not be uppermost in the minds of the Murdoch family (beyond being a revenue stream) if they get control.

    Its bad enough that Bernie/CVC effectively dictate the F1 calendar based on the ability of circuits to pay the fees demanded of them, resulting in historic venues such as Imola disappearing for good. Selling to a global media organisation can only be bad news in the long term as the owners seek to harvest every last penny of income they can.

    Maybe the time has come for the teams to put their own bid together to secure the long-term future of F1 as a sport rather than as a cash cow for some company that has no history in, or knowledge of, motorsport.

  5. james butler says:

    I think if Formula 1 does go to Sky it would lose millions of fans and it is a fans sport. I think sponsors would maybe be put off with it not being totally accessable to everybody

    1. C-M says:

      Being sold to newscorp doesn’t necessarily mean that sky would get the TV deal.

      That would be subject to proposals from other TV companies and subject to competition regulation. In addition to the fact that current rules dictate that in the mainstream markets, F1 must remain FTA

      1. James Allen says:

        That’s right. People shouldn’t expect that it would only go on Murdoch owned channels.

      2. Franko says:

        People must be aware that we live in modern
        times and user pay is the name of a game.
        Mr R Murdoch is the most briliant and powerful
        person,second to none, and its only a question of time if he wants it,not if or how.
        Mr Allen would you know who financed the the
        Abu Dhabi Ferrari Park,

      3. Tim. says:

        They see this as a huge revenue stream that is not on pay per view….increase their portfolio so to speak

      4. Adrian Jordan says:

        The current rules that expire at the end of 2012. Unless the teams keep that clause in the new Concorde Agreement (which I would actually expect them to as it makes it easier for them to get sponsors).

        On the other hand, the competitions commission could make a ruling that the only way they would allow the deal to go through would be if F1 didn’t go to Sky, I think…

  6. jmv says:

    And where is Ron Dennis in all of this? Is he part of the additional funding?

    For him to have gone through a lot (and losing a lot) trying to get more control of F1, bringing ownership closer to the teams… I would find it strange that he lost this ambition.

    Also I remember that on the day (or day after) the Mosley Nazi sex scandal broke loose, Ron Dennis presented his vision of the future of F1… or something along those lines.

    So I would think his ambition is still there.

    Also if Ferrari is in, it would make sense for Mclaren to be in as well..

    Interesting. I hope that we as viewers dont get pushed down the throat pay-per-view.

  7. Nick says:

    Well if F1 went pay TV then I wouldn’t watch it anymore.

    I love F1…but I’m not going to pay subs for it.

    1. James Allen says:

      People said that about football. Premier league seems to be doing okay

      1. Jonathan Lodge says:

        Premier league doing ok? Is that why the teams are all being bought by foreigners, all on the edge of bankruptcy and watching arrogant, overpaid ball kickers bringing the “sport” into disrepute?

        Football has been on a slow burn downward spiral for years. It is only the sheer mass of supporters that has prevented the spiral being a terminal nosedive. And all this since Sky overpaid massively for TV rights and has to extract money at every opportunity – such as the obscene amounts they demand from the likes of pubs.

      2. Dave P says:

        Here here… I couldn’t agree more.

        James, maybe you can afford sky sports, but alas I cannot not. If the greedy teams take that route at the expense of tue fans… then they deserve their fate…

      3. C-M says:

        That’s got nothing to do with the EPR being on pay tv. Or the collective TV deal.

        There would be far less money, far more debt if the sport was only FTA. Championship clubs certainly wouldn’t be getting the tens of millions of pounds in parachute payments they get now.

      4. Edward Valentine says:

        Aren’t many of the Premier league clubs in debt? As I understand it an F1 team has to have a cash threshold in the form of a bank deposit in order to be on the grid. If this was the case in football the Premier league would have only three or four teams.
        The revenue mix of a football club is also very differnt to an F1 team.

      5. Jeroen says:

        Sorry James but you are wrong in that comparison. The premiership thrives because it’s a bigger game but also because it generates foreign revenue(and rather a lot). Think f1 has about 550m world wide annual viewers. The premiership alone is viewed by nearly 1bn world wide per year! Then consider that from the 550m in f1 most is actually from not so affluent countries like brazil, china etc. With for example a mere 30m viewers in the uk.

        As Bernie has rightly pointed out F1 cannot do without public tv, not for a while anyway.

        Also is the EU going to approve one media owner having rights over o e entire sport? Find that hard to believe

      6. Alan Dove says:

        F1 is 24 cars and 12 teams. So it’s not strictly an ‘entire sport’. The entire sport’ of motor racing has hundreds of different categories and divisions nothing to do with F1.

        There is plenty of other rival motorsport series that would love to have public funds to help boost their popularity. Why should F1 have the monopoly in there area?

        If F1, a sport for the very wealthy, can only survive with the help of tax money then that raises serious moral questions.

      7. CJ the 2cnd, probably... says:

        I too have no intention of paying subs to watch F1, surely the point of sponsoring teams is to expose your brand/product/whatever to the public, should the public also have to pay to be advertised at? (please excuse dodgy grammar!)
        I accept that advertising is the cost of free television and licence fees the cost of advert-free television, we don’t need Murdoch sucking us dry. I suspect this would reduce viewing figures which in turn would reduce the attraction to sponsors and therefore ultimately lead to the decline of F1.
        I enjoy F1, but not enough to pay for it (other than by acceptance of exposure to advertising.) It comes down to value for money, I’ve just paid £24 to watch three British Touring car rounds at Thruxton and a very full programme of supporting races – a bargain.

      8. Mark L says:

        It’s already an elitist sport to get into, you must be ok with it being an elitist sport to watch too. I’ve been a big F1 fan for thirty odd years and is currently the only sport I watch. I really look forward to race weekends, but there’s no way I would pay a subscription to watch it, or any other sport for that matter.

        I’ve been fearing this situation arising for some time now, but, if greed takes over, like it has done with football, and the fans lose interest, then F1 will deserve all it gets! I won’t be watching it’s demise, that’s for sure.

      9. Dom says:

        Cricket and boxing however….not so much.

        F1′s relative minor interest makes it more akin to the above than to football I would think.

    2. galletto says:

      I used to say that i would not pay to watch F!
      When I moved to the US, the only way of watching it, was by paying.
      Guess what I did?
      I began paying and it was a fair deal.

      1. James Allen says:

        So if there are 100 million people like you at $100 a year..but there is a long way to go and by no means clear that it’s a direction other stakeholders want to go.

      2. seisteve says:

        You do not need to go far, I live in Belgium and during the ITV years I had to pay to see the sport in English and over the Internet. I got the race but the quality was pretty awful

        But watching it for free in Italian with the excited commentators was pretty cool.

      3. Olivier says:

        $100 is a lot of money if you’re new to F1. So, why not charge per race?:

        $100/20 races = $5/race weekend. This way you can cherry pick your races. I would skip Valencia, Abu Dhabi, Hungary and Bahrein (political reasons).

        What I would do is:

        $100/4 friends = $25/season = $1,25/race + lots of shared cheerful moments.

      4. Nando says:

        The premier league went from 30 million viewers, to 20,000 when it went PPV in China.

      5. James Allen says:

        German SKY has 70,000 subscribers, apparently. But that’s because it’s free to air on RTL. Don’t forget that Sky has SKY 3 on Freeview ie free to air. But it’s not necessarily just about TV, it’s the other opportunities which are interesting

    3. Chris says:

      I would never pay to watch and I think F1 is living in a dream world if they think that idea is a feasible way to grow the sport. It would become even more niche than it is now.

      1. James Allen says:

        So why does it work with the Premier League, then?

      2. Pit straight weaver says:

        I’d guess because the PL is on almost constantly, live matches at least three or four days a week – sometimes several matches per day – hundreds of matches per year. So in terms of value for money the footie supporter gets a lot for the subscription – F1 can’t compete with that unless it included support races etc, but even then it’s only 20 weekends a year. And, I’d guess the average age of F1 viewers is older than that for the PL – people with even very young kids, like mine, feel pressure to take out the SkySports sub (I’ve resisted so far) – I don’t think there’d be anything like the same pressure on parents for F1. My kids barely know what cricket is, whereas I grew up with test matches on TV every summer (eg Botham’s Ashes ’81) and I just reckon F1 would end up following a similar path. Not saying nobody will follow, of course they will, and probably enough to make money for Sky, but it won’t be part of the background to many kids’ lives, which means they’ll probably not follow it as adults either.. Just my opinion.

  8. Rich in Norway says:

    I really hope this deal does not happen. F1 is great at the moment and does not need any Murdoch interference!

  9. Matt says:

    It will be a dark day if News Corp/Murdoch get hold of F1. If it went to pay TV it would be the slow death of F1. Whilst Sky i’m sure make money on buying sports with there ad driven business, in effect they also kill them slowly.
    Look at Cricket, a dying game now despite the ashes victories as its only on pay TV. Rugby another example, boxing as well. Yes they have football but F1 doesnt come anywhere remotely close to the popularity of football.
    I’ve been watching F1 since 1993 and never missed a race but i refuse to subscribe to Sky Sports despite having Sky for 15 years.
    The teams must stop pay TV if it were to happen.

  10. Jonathan Lodge says:

    What a frightening prospect!

    We think Bernie is bad enough but the thought of Formula One being controlled by Murdoch doesn’t bear thinking about… and will drive fans away by the million.

    TV on Sky and only News Corp titles being aloud to write about it would drive many current titles – and journalists like James out of business.

    1. Paul Sivyer says:

      The loss of James’ commentary would be a disaster in itself!

    2. Mike says:

      James as a fan of your website and work I would appreciate it if you would clarify the extent of your working relationship with news corp. Given that you are employed to do f1 coverage in Australia by a network that has recently been bought into by news corp.

      1. James Allen says:

        No relationship with them to date. There are some ownership changes at Network 10, involving Lachlan Murdoch taking a stake, I believe, but I’ve not had any dealings with anyone new, just the same producer as before. I’ll let you know if anything changes!
        I’ve no axe to grind on this story, interested to see how it develops

      2. ian says:

        We who read your FREE blog James must accept you have to make a living.

    3. Adrian Jordan says:

      “TV on Sky and only News Corp titles being aloud to write about it would drive many current titles – and journalists like James out of business.”

      I’m fairly sure THAT would be illegal under freedom of the press laws.

      1. James Allen says:

        Yes, that’s scaremongering. I’ll still be here whoever owns F1!

      2. Kieran says:

        Good! Still the best F1 blog on the web, despite the currently rather heated debate!

      3. Tim. says:

        Freedom of press issues do not cover this at all

  11. Edward Valentine says:

    As I understand it CVC are repaying large debts but will be debt free within a year and it will be at that point when they can start to properly enjoy the revenue from F1. In this case it shouldn’t make sense for them to sell the sport to anyone.
    I can see F1 going the way of A1 GP if Sky get a hold of the broadcast rights as the result of a News Corp take over.
    If people didn’t purchase Sky then they would close down and most sports would be on FTA essentially at no cost to the public.

    1. Damian J says:

      “In this case it shouldn’t make sense for them to sell the sport to anyone.”

      It would if they were presented with a credible threat from the top teams to leave F1. ….unless CVC are prepared to pay up in the next round of negotiations….which would be more likely if they have lower debt repayments.

  12. Dave P says:

    James, could you put a vote up to show who does or does not support the idea? Then you could hand the 90% rejection of the idea to FOTA – they constantly say they want to hear what Fans think… well lets give it to them.

  13. Paul Sivyer says:

    I certainly would not pay Sky to view F1. As a total non – subscriber it would be just too much money.
    Although Sky does put on a good footie match, I doubt it could come anywhere near to providing the quaility given to us by the current BBC team.

    I also agree with the reply above relating to what’r happened to football since the rights were bought by Sky. Most teams are in some sort of financial trouble and they do depend on the fans to keep the ship afloat.

    I also wonder what the BBC will do when their present contract runs out. Things are not good there either at the moment.

    Then there’s the forthcoming “green” rule changes too.

    I fear we are inevitably looking at the end of F1 as we know it.

  14. Jimfectious says:

    Given what you describe, I think it might not turn out that bad. But I watch F1 in the states and think the pay model definitely wouldn’t be tried here. Premier League is on ESPN and is “free” with cable.

    I think this consortium would be more thoughtful about where they place races than the current regime and more thoughtful on how to reach fans with all types of media.

    Do you see manufacturer involvement extending to lower end teams and giving them an ownership stake (and some stability)? Or would they be left out but get more money?

  15. Alan Dove says:

    Well done James on another balanced article yet again!

    To the doomsayers – It’s not in the interests of anyone looking at buying F1 to ‘destroy it’. The consortium looking at F1 are probably looking at investing a gigantic sum of money, it is not in their interests to see the sport die. It doesn’t stop bad investments or decisions being made of course.

    I am no expert, but empty stands in many other the new tracks does suggests a failure to penetrate new markets at the expense of public funds. If F1 is to survive as a global spectacle it needs to improve in this area, and maybe this is a possibility.

    The issue in the UK is we have a very clever licence system. It makes the idea of paying for a subscription service somewhat harder to digest. If you’re taxed already to even be allowed to use a TV, why should you pay more? The fans reaction is very understandable.

    I am very 50/50 about this. It’s has it’s positives and negatives, but before passing judgement why not wait until you see what’s being put on the table.

    1. Mark L says:

      If the Murdochs are involved, you pretty much know what to expect, and if they prove me wrong over the long term, then great, but I won’t hold my breath.

    2. James says:

      I hear what you are saying, all I know is, if it moves from the BBC I will just stop watching.

      1. Alan Dove says:

        How can you be so sure?

        No-one knows what deal is yet on the table, so why are people so fast to be negative?

      2. Tim. says:

        Why do you like BBC or F1

    3. Andy says:

      I agree that until a detailed offer is made, what’s all the fuss.
      Quite often most of us have short memories and it’s only fair to say that the current level of BBC coverage is only really due to the way that ITV brought the standard up. Although I disliked the adverts, their coverage and production was way above the BBC’s previous efforts.
      I believe that Sky would in fact improve the coverage significantly. Firstly you would get true HD. It is well known that the BBC do not transmit full HD through their decoders, it is nothing to do with the host provider.
      I do subscribe to Sky Sports and I would rather not pay like everyone else, but I also love cricket and the amount and quality of coverage by Sky is exceptional.
      Since the license fee goes to the BBC, is this not pay tv?

      In any event, we are quite a way from any changes I think.

  16. Jenny says:

    I thought I was a die-hard F1 fan until this news came along. I refuse to give any money to the Murdoch corp, so this takeover would likely end my relationship with the sport. Shame. I really hope it doesn’t happen.

  17. Darrren says:

    In New Zealand we have to pay sky to watch F1 so all this free to air stuff is rubbish

    1. Adrian Jordan says:

      How much does it cost you and do you already have to pay a tv-license?

      My issue with any move to Sky Sports isn’t that I resent having to pay to watch F1 – if I could simply pay £5 a race to watch it then I would, great.

      But a subscription to Sky Sport runs at around £40 per month which is nearly £500 a year. Even if I wanted to pay that, I couldn’t afford to.

      At the moment I live in a an area where I can just about get the basic free-to-air channels on Freeview (though the signal quality is that poor that the sound often drops out even on BBC1 and ITV1) so if I could afford to subscribe to satellite and get all the channels that brings then that would be great, but I can’t.

      If F1 moved to pay-per-view then I would still try to follow the sport online, but I wouldn’t be able to afford to watch the races. Simple as that.

  18. Kieran says:

    James,

    Genuine questions about the lower formula’s such as GP2 or F3. Since they are only shown on satellite or subscription, how difficult do they find it to get sponsors?

    I know they generally need less sponsorship because they have much lower costs, but do they find it particularly hard? Do the much smaller television audience make it difficult to bring people on board?

    I’d love to know, because it might show the difficulties of F1 in a microcosm.

    PS Who else would like the GP2 on the BBC red button?

  19. MISTER says:

    It’s all about money. Teams, CVC, new buyer.
    CVC at this stage are getting 53% and the team 47% from the profits.
    With the need for a new Concorde Agreement, the teams are looking to get a bigger share for themselves, which can go as high as 70-75%.

    The majority of people if not all, who don’t like this deal to go ahead, don’t like the pay-to-view idea. So this is a big thing.

    Maybe James can help clarifying something. What will happen if the teams and CVC don’t agree on the profits share percentage in the new Concorde Agreement?

    I might be wrong, but I see this as a posibility from the teams like Ferrari and McLaren to create this idea of a possible deal to put pressure to CVC. The pressure is to allow the teams a better possition while negociations for the profits percentage will start.

  20. Conrad M. Sathirweth says:

    To be honest if it went on to pay TV it would be really annoying but I still would not pay to watch it, I would just watch it free on the internet like with football.

    I think it would also lose a lot of the more casual fans, it would also make it harder for new fans to get into it and over the years the fanbase for F1 might start to decrease.

  21. Merlinghnd says:

    I am sure a deal will happen. It is in the FIAs interest to be bought out of their current 100 year agreement for better terms, it is in CVCs interest to have the business bought from them with a suitably acceptable profit, therefore wiping their F1 business debt ( a debt negotiated when det was the fashion and money easy, not the same now) and in the teams interest to get more money out of the sport under a new Concorde Agreement.

    The issue is again where will the money come from, has to be pay per view and as James has said 100million subscribers plus at $100 a season is a lot of money.

    I’ll carry on reading James and watching the highlights on BBC in the evening.

    It is interesting that this is happening when the sport is going through an “exciting” phase and high viewing numbers. I cannot imagine this happening in the “boring” Schumacher days.

    Regarding the “boring” years, I found I would watch the start, see the race settle down and then go out for a Sunday afternoon with the family, maybe in thev future I will miss the start altogether and save my money and then gradually loose all interest in F1.

  22. Roger Melly (the man on the telly) says:

    F1 will ultimately end up being sold. The only sticking point will be the price.
    Why?
    Bernie is getting old. I wouldn’t tie my money up in a business run with by an 80 year old. I’d be looking for either a good succession plan or to realise my profit and pass that problem on to the next guy who will have his own ideas about who and how to run the business.
    Now is the ideal time to do a disposal. With the 100 yr agreement, a new partner has a long time to realise their profit and CVC can extract maximum ROI. It’s not about pay TV or leaving it on free to air. Over time that will change and there is massive potential for generating extra revenue through new media streams i.e. IPTV, ipad streaming, re-instating multiple streams (in car, pits, following each car etc) whilst still leaving free to air. And lest we forget it is not mandated ‘live’ free to air. That is or could be a premium product as would advertising free streams.
    Revenue sharing on a progressive basis would also tie the teams in. Whether that be on a pure cash basis or as shareholders is to be seen but you can bet your bottom dolllar that everyone is going to want to share the cake.
    Williams is a test case for the future owners. If their float, albeit going badly at the moment, realises good gains for it’s shareholders you can guarantee a float is on the cards somewhere down the line.

    1. jonrob says:

      I’m sure that Bernie fully intends to live out the 100 year deal, even if it means living until he is 180.

      1. Rich C says:

        Exactly what I thought too!

  23. Mike Lea says:

    It would be a very sad day if the BBC loses the F1 coverage…ITV did a fine job, but no matter how good the production was, adverts ruin racing! Sky would throw plenty of adverts into their coverage…not good for the fans!

  24. Tim says:

    I’m currently moving flat and have had to make the tough decision to scrap Sky TV and make do with Freeview as i can no longer afford sky. A big part of that being an ok decision was that F1 is on the beeb. I would pay to watch F1 but the fear is the news corp would make you buy everything they offer just so you can have the one thing you want.

    1. kostre says:

      That is my fear too, I don’t know about UK but here in france Canal+ is trying to do the same thing, you subscribe for something you need but you end up paying for other things you don’t need. The best option will be pay per view via the net…eurosport does it for just 40 euros a year…

    2. Tim. says:

      What is “on the beeb” mean

  25. Road of Bones says:

    This is nothing more than Ferrari trying to influence the next Concorde agreement, IMO.

    By hiding behind Exor & Newscorp, they are sneaking about talking to “influential parties” (by which I take to mean team owners, key sponsors, circuit owners, etc.), and sounding them out about making some fundamental changes to the Concorde Agreement next year that will ultimately pave the way for a Newscorp takeover (without Exor) in the future – i.e. do away with the “free-to-air” rule amongst others. I expect that Ferrari are angling for their previous position of priviledge, rather than an outright stake in the control of F1 as a whole – but by facilitating a Newscorp takeover and getting rid of Bernie/CVC (& probably reigning in the influence of the FIA on setting the rules), they hope to get back to where they were in the early 2000′s (i.e. dominant).

    The carrot being dangled to the “influential parties” is probably along the lines of the Premiership football model of massive financial return from broadcasting to offset the loss of revenue from current sponsorship, plus the idea that the new structure would limit the level to which the FIA can meddle with the teams & the rules (which Ferrari hate, having found that Jean Todt is not quite as Red-all-the-way-through as they expected).

    Let us hope therefore that FOTA are not easily swayed by such a shiny carrot, that ultimately may turn out to be made of painted wood…

  26. RickeeBoy says:

    You have to follow the money for buying F1.

    You see that Sky was originally marketed as Pay TV with no adverts and good quality – but the affluent demographic punter who could afford Sky was exactly the person who the Advertisers wanted to get in front – so Sky sold out to make twice as much money. ( this happens across all SKY TV not just Sports )

    The Bloodsuckers ( Murdochs ) have seen the power of TV and therefore with Sport popularity increasing in the future then expect your viewing quality to decrease and their revenue to increase.

    You – the fans are now no longer cared about – It was a sad day for the sport when Bernie sold F1 to CVC – It will be a sadder day if the Murdoch’s get a hold of it.

    Expect to be paying for the privilege soon.

  27. Darren says:

    Why do the teams not control the rights and cash themselves? Correct me if im wrong but I thought that FOCA or FOM or whatever they are called was established to get a fair deal for the teams?

    This CVC apparently take something like 50% of the revenue for themselves. If the teams did it then they would get 100% of the revenue. Obviously someone would have to do it for the teams, simple hire a team of lawyers and accountants, pay them a fee every year.

    That way the teams get twice the amount of money they are currently. That gives the teams too much IMO so they should reduce the truly ridiculous fees that are being demanded of the circuits, that way we could hopefully go back to racing on some proper circuits too.

    The teams would be in charge of everything commercial, if Mr Murdoch did want to show F1 then he would have to put in a bid alongside the Beeb, ITV etc etc. Then the teams would decide whats better financially and whats better for the sport and select a winner based on a compromise of those two criteria.

    Who are this CVC and why did they aquire control in the first place? It all seems unneseccarily complicated with far too many people involved for the sole reason of filling their own pockets!

    1. jonrob says:

      “Why do the teams not control the rights and cash themselves? ”
      How do you think Bernie got started?

    2. Rich C says:

      You’re suggesting that the inmates should run the asylum?

      It didn’t work in the US. After the big split CART had better cars (non-spec!), better tracks, better racing, better drivers, better everything than the IRL.

      Except for management structure.

      IRL was and is owned by the George family, and was run as a benevolent dictatorship by Tony George.

      CART was run by committee of owners.

      Guess which one is still around?

  28. Ben G says:

    That Luca’s a clever a fellow.

  29. Stephen Kellett says:

    Part of the problem with the Murdoch empire, is putting pay TV issue to one side, they have proven themselves completely inept when it comes to the Internet.

    The paid $580 million (or thereabouts) for MySpace. This morning an analyst from Enders Analysts reported on BBC Radio 4 that giving MySpace away for 1 dollar would result in a net benefit to News Corp. They purchased an asset and then mismanaged it into its grave, squandering half a billion dollars in the process.

    Not very reassuring when it comes to the future of F1 and the Internet (which most people already thinks FOM handle badly).

    1. rad_g says:

      myspace is completely different from f1

  30. Owen says:

    Great read James, many thanks. To fan the flames a bit, I wonder if the timing of the bid is also connected to the legal proceedings in Germany. If it does come out that there were inappropriate conduct, wouldn’t CVC be best served by selling now before the value of F1 could suffer? Sky might be their easy way out.

  31. Bill Johnson says:

    Let’s see, Murdoch owns FOX here in the states. NASCAR is free on FOX. Murdoch owns a majority stake in SpeedTV. F1 is free on SpeedTV.

    Yeah, sounds like Murdoch is all about subscription fees.

    Yes, you gotta pay for cable. Just like you gotta pay for a phone or the internet. If you think that is PPV, let me introduce you to the UFC. $50 for 2 hours on Saturday night.

    1. Adrian Jordan says:

      Yes but here in the UK Murdoch doesn’t offer any completely free channels to everyone. Heck, he even charges people to view The Times website…

  32. Knutty Boy says:

    Fairly sure I read somewhere that Bernie includes clauses in the contracts requiring those signing to blacklist any events that are not FIA/FOM sanctioned. So if this applies to tracks and broadcasters…. where would any breakaway competition be held and what would we be watching it on???
    I would like to know more about Bernies alleged right to veto… and for how many pieces of silver his morals can bought.

  33. Michael Prestia says:

    I only started watching F1 as a boy because it was on TV and it was free. If I had to pay I would have never started in the first place.

    The coverage in Canada is HORRIBLE!!! I have to settle on TSN’s crappy coverage which is limited to 1hr of qualifying and the race. We do not get to see any interviews and pre race or post race shows… because TSN has to switch over to bowling or Poker after dark! And this year Rogers Cable has “blacked out” Speed TVs coverage in Canada.

    However, horrible the coverage is in Canada it is free with your cable package so if they start to charge… even though I am a huge fan, F1 would lose me.

  34. Rob Jackson says:

    I’ve already shared my concerns about the Murdoch’s getting their hands on F1 in your earlier article about this James.

    What worries me even more now is Ferrari’s involvement. We all know that in their eyes they think they run F1 because of their history in it. Sometimes their attitude seems to be that the ideal F1 for them would be to just have their cars on track so they are guaranteed a win.

    If Ferrari get involved in owning F1 for real rather than simply behaving like they do then that could kills the sport even more than the Murdoch’s getting their greedy hands on it.

  35. Andy C says:

    What bemuses me and amuses me in equal measure is that the top F1 teams want more control over their destiny, and dont believe they get a great deal out of the financial deal.

    I would suggest that if F1 is something that is sold at the right price by CVC, that the F1 teams should buy it.

    Why waste money setting up a rival series, when you can purchase the rights?

    I would much rather it was in the hands of a trustee board running the teams (i.e someone like Sir Jackie as chairman), than Mr Murdock and any consortium.

    I shouldnt really try to apply real world logic to F1 of course ;-) It’ll never work.

  36. Harvey Yates says:

    This is unlikely to be a straight buy-out. It is, as hinted in the article, a ploy, an opening gambit.

    So what can FIAT and Murdoch be considering? FOCA cannot start a breakaway series without income, and that includes TV rights. If Ferrari and Mclaren, and perhaps Todt, want to shake the yoke of CVC from their shoulders then what better way than threatening to take their business elsewhere?

    The only thing that CVC has which is of itself valuable is the copyright to the F1 logo. Beyond that it could all turn to dust.

    I’ll try to avoid any more cliches.

    If the major teams move on to a new formula, under the auspices of the FIA, then CVC will be left with little to market. They might well see the value of their badge collapse.

    I would probably pay to watch Ferrari, Red Bull, Renault, McLaren and others race, regardless of what it called itself.

    If the rump that was left was just this year’s three new teams – and one at least is likely to follow the big guys – and perhaps Williams then I doubt I would bother switching it on even if it was subject of the BBC’s excellent coverage even if it had the F1 logo.

    Something is going on that is quite revolutionary in our sport. We, of course, that’s the fans, have absolutely no control over the result.

    I’m nervous. I certaily do not think F1, by any other name, is safe in the hands of Mudoch.

  37. Rich C says:

    It continues to amuse me that most of the comments herein focus on the evil Murdoch and media issues.

    The true “evil” would be 3-Car Monte owning/controlling F1.

    If you think for 1 minute that’s not what this is all about you better think again.

  38. terryshep says:

    James, your Tweet directing readers to this site has given me a whole new view of F1′s commercial appeal. Not that I fully understand the possibilities behind such thinking, to be honest.
    http://lookatluca.tumblr.com/post/5218546296rs

  39. Phillip says:

    James
    Why don’t the teams all unite, pull there finger out and buy f1 equally amongst them or create a whole new championship. They can reform the whole sport and make billions at the same time. As you alluded to Merc and Ferrari are on the band wagon. With Mr Redbull not shy of the Dollar and Mclaren doing very well it makes logical sense. I personally think this should include Renault, Williams, Lotus, Virgin. These partners are also wealthy
    The problem with F1 is not all the the cash goes back into f1. The structure and the way it is setup the teams and the countries hosting the races are losing millions.
    Once the Concorde agreement expires, there is nothing holding the teams to the championship. They can walk away and the rights that CVC owns are worthless. The teams can formulate there own championship and get rid of stupid regs. (4 cylinder turbo charged engines.. This is a joke should be v10…) The teams can call it F1 or Formula 1 and Bernie the FIA or CVC cannot do anything about it. (recent court cases Bernie lost support this.) .
    Furthermore there is nothing stopping the teams racing at the tracks. Bernie and CVC do not own all the tracks and im sure all the contracts with the different race tracks would have clauses like, Ferrari must compete for payment.
    There will be nothing lost for the spectacle because people don’t watch the FIA f1 world championship because CVC or the FIA own it. They watch Formula 1 because of the drivers and cars.
    This makes logical sense to me. When the individuals in this case the teams, are bigger then the business, (Bernie, FIA, CVC) they should control the sport. Not some puppets outside it. Bernie has done a great job, but it is now time for the teams to take control of something they created. They can appoint people outside the sport to run it. (Hell even employ Bernie and Flavio.) 80% of the revenue goes to the teams evenly. 15% goes to prize money. 5% goes to administration. Intially 80% will be the same income hey get now, however within 3 years this will triple. What are your thoughts..

    1. James Allen says:

      You are right, of course, in some of what you say about the teams and there are many possibilities of how this Murdoch situation could go.

  40. Ed Bone says:

    Notable for his lack of comment in this dirt-cloud of speculation is one Jean Todt, head of the FIA and something of a recluse it seems.

    Non-one seems to be talking much about the FIA in all of this, but as I understand it Todt has at least asserted that the FIA does have a veto on the sale of F1 TV rights – James perhaps you can confirm this?

    What I want to know is where the FIA stand on the any bid, and in particular if they are going to defend their own Formula from the potentially negative consequences of commercial over-exploitation, which could according to some at least, eventually kill F1.

    For my part, my view is that News corp don’t have a Midas touch, and in terms of the UK coverage one of their main rivals just happens to be Virgin, who just happen to have an F1 team.

    Here is an opportunity for Branson to wade in surely?

    I think Sir Richard would do a far better job commercialising the sport, certainly in the UK, than the ‘antipodean’ octegenarian and an italian principal who thinks his team deserve special treatment.

    Maybe Richard should have dinner with Jean…

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