04/05/2011
NEWS STORY
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For the past two weeks rumours have swirled around Formula One that Rupert Murdoch's News Corp media empire and Carlos Slim, the world's richest man, would place a bid to take over the sport. F1's boss Bernie Ecclestone tried his best to set the record straight by saying that the initial story by Mark Kleinman, business editor at Murdoch's Sky News channel, "is all rubbish." He added that F1 is "not for sale," and the chances of its owner CVC selling to News Corp are "close to zero," because "it would restrict the ability to negotiate with other broadcasters." However, the rumours persisted and pages and pages were written about a phantom deal. Now CVC has stepped in to finally put the rumours to rest.
Yesterday it emerged that the EXOR investment fund had agreed to work with News Corp to see if a takeover of F1 is possible but it acknowledged that "there can be no certainty that this will lead to an approach to Formula One's current owners." It has come to light that it has already fallen at the first hurdle.
In today's Financial Times, Roger Blitz, the newspaper's extremely talented leisure industries editor, reports on an exclusive interview he has done with a CVC spokesperson who acknowledges that News Corp has made an approach about buying F1 but it was told that the sport is not for sale.
"James Murdoch has informed us that the approach is friendly, at a very preliminary stage," says the spokesperson adding that Murdoch has been made aware that "Formula 1 is privately owned by CVC and not currently for sale." It obliterates any chance of News Corp, EXOR or other companies from buying F1. As Pitpass has previously reported, Ecclestone says CVC may never sell F1 since it gets such a high annual dividend from the sport.
CVC's precise return from F1 will be revealed in the 2011 edition of F1's trade guide Formula Money, which launches on the 18th May in London's RAC Club. Formula Money is authored by Pitpass' business editor Chris Sylt so our readers will get the most detailed review of the data and, having seen a preview draft of this year's edition let's just say that it would be an understatement to describe F1 as a cash cow for CVC.
Even if CVC wasn't getting such a high return from F1 it most probably wouldn't want to sell now anyway as anyone who closely follows F1 will know. CVC has owned F1 for five years but held on to its previous motorsport investment - that of MotoGP's owner Dorna - for eight years. Indeed, CVC only sold Dorna because the European Commission demanded that it had to do this when it bought F1.
The news about CVC rejecting News Corp's bid will come as a blow to EXOR. As Sylt reveals in his analysis for Pitpass about EXOR's involvement, there may well be a very good reason why the investment fund would prefer it to be believed that it is planning a bid for F1.