12/05/2011
NEWS STORY
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Just two days ago in a detailed analysis explaining why Rupert Murdoch's News Corp media empire and investment fund Exor aren't buying F1, Pitpass' business editor Chris Sylt wrote "perhaps Sky News will next come up with reports about other investors who have joined Exor and News Corp in their bid to maybe never bid for F1." Sylt didn't think that he would be proved right so soon.
Surprise, surprise, Sky News has now released details of other companies which have joined News Corp and Exor to not make a bid for F1.
First Sky revealed that News Corp and the world's richest man Carlos Slim may bid for F1 and we were expected to believe that the duo was happy with Sky telling this to the world even though it hadn't yet approached F1's owner CVC. Then Slim was quietly dropped in favour of Exor which released a statement confirming that "there can be no certainty that this will lead to an approach to Formula One's current owners." It was followed by every single one of F1's powerbrokers saying that the sport is not for sale.
Now we are told by Sky News' business editor Mark Kleinman that "some of the global media industry's biggest names, including Google's executive chairman and a former president of Facebook, are poised to become backers of an emerging bid to buy Formula One motor racing, I have learned."
Let's get this straight, we now have 'news' about companies which are "poised to" join a group which has not yet made a bid for something which the owners have declared is not for sale.
If this isn't dragging the story out then what is? What next - another story confirming that the companies poised to join the group have joined the group (which has not made a bid)? Or maybe one which confirms the involvement of others who are happy to get the publicity from being connected to this phantom bid. From their perspective it is a win-win situation because any connection to F1 raises their profile though whether it should be considered as news is certainly an open question. It puts Sky News on an ever closer footing with its American counterpart Fox News.
Given this backdrop it is almost not worth explaining the details of the company which has allegedly joined the group to maybe never make a bid for F1. However, for the sake of completeness, we can say that the company in question is Raine, a boutique bank which Kleinman says "is not a name known to many people outside Wall Street and Hollywood." However, at least one person involved with F1 knows all about it.
Raine is a client of Sylt's Formula Money, the F1 industry monitor, and incidentally the Royal Automobile Club will next week host a glittering launch of its 2011 edition which will contain some real news about F1's financial position. Pitpass, of course, will have all the details from the launch for its readers but we would certainly not say that this relationship implies that Raine will invest in F1 - quite the opposite in fact.
Pitpass has already written a great deal about why a News Corp-linked takeover of F1 won't happen and nothing has changed on that front. The latest 'news' just makes it all the more entertaining. We can only imagine how much Ecclestone laughed when he heard about it over dinner yesterday at Sale e Pepe.
It is worth pointing out that although Kleinman notes that a bid for F1 has not been made (despite a challenge to him from Ecclestone) he adds that Raine's involvement "adds a powerful backer to what is becoming a fascinating bid to acquire control of the world's most glamorous sports franchise." That "fascinating bid" will be the one which has not even been made...
Interestingly, Kleinman also states that "the idea of [CVC] holding onto F1 in perpetuity is not credible." This contradicts with the view from Ecclestone who has said that CVC gets such a high dividend from F1 that it may never sell. The 2011 edition of Formula Money will reveal for the first time the annual profit made by CVC from F1 since it bought it in 2006 and when Pitpass covers the news readers will be able to see exactly what Ecclestone means.
Nevertheless, we cannot rule out CVC selling at some stage in the distant future. As FIA president Jean Todt said at last weekend's Turkish GP, "from what I know CVC has not the intention to sell. If it will be true in five years, 10 years, honestly it's not a question for me."
CVC bought F1 on 24 March 2006 so it has only just held it for five years. Sky News could do a lot worse than bearing in mind that CVC held its previous motorsport involvement - that of MotoGP's rightsholder Dorna - for eight years and only sold it because the European Commission forced it to. Yes, there is a difference between eight to ten years and in perpetuity but likewise, there is a big difference between five years and eight to ten. Given the return CVC will eventually make on selling F1 (as Sylt's Formula Money will reveal), anyone who thinks that it will not wait for at least as long as it held Dorna is certainly on the wrong track.
When there is real business news to be dug up about F1 one wonders why some prefer to promote details of companies which are poised to join a group which has not yet and, by its own admission, may never make a bid for something its owners have confirmed is not for sale.