25/04/2011
NEWS STORY
There has been lots of rather premature talk in recent days about whether F1 boss Bernie Ecclestone would 'survive' a takeover of the sport by News Corporation. Pitpass is quite sure that Ecclestone, who likes a good joke, will be laughing his socks off at the stories because as our business editor Chris Sylt has already reported, News Corp isn't buying F1. One wonders how long it will take for some media outlets to realise this.
The latest report along these lines comes courtesy of a piece in the Sunday Times which no less than four authors contributed to. The only news in it seems to be the rather generic comment from Ecclestone saying that "I'm old enough to get a pension, so I don't have to get a job. I would have to be sure the people [who end up owning F1] are people I would like to work with and whether they would want to work with me."
As other outlets have done, the Sunday Times also says that F1's majority owner "CVC is thinking about selling up." However, as other outlets have also done, it does not allude to any source for this claim which Ecclestone has repeatedly denied. The Sunday Times claims that "after six years as owner of the company that controls F1's commercial rights... [CVC] would like to see a return." However it omits the fact that CVC held on to its other motorsport investment - Dorna, MotoGP's rightsholder - for eight years and only sold it because the European Commission forced it to do so when it acquired F1.
There is also the not so small point that CVC is already getting an annual dividend from F1 which, as Ecclestone told the Telegraph, is so great that CVC may not sell F1 until the distant future.
As Pitpass has reported, F1 had an overall net profit in 2010 of £9.1m ($15m). CVC itself got 63.4% of this - a sum of around £5.8m. However, if F1 had not had to make any interest and debt repayments last year this would have left its owners with an additional £241m ($397.7m). As Pitpass has pointed out, Ecclestone says F1 will be debt free by 2014 so it is little wonder that it may be many many years before CVC sells up.
Ironically, the Sunday Times article itself provides a good indication that the subject of Ecclestone's departure is just a bit premature. Not only does it state that "CVC is thinking about selling up," but it adds that "CVC needs to have a successor lined up."
Perhaps it could be said that having a succession plan would make F1 more valuable though as any F1 analyst will tell you, much of the sport's value is tied up in Ecclestone himself and as one industry leading brand expert recently told Sylt, "Ecclestone himself is Formula One's brand." However, CVC certainly doesn't literally need a successor for Ecclestone if it is selling F1 and likewise, if it sells F1 then a succession strategy for Ecclestone is no longer CVC's problem.