31/05/2012
NEWS STORY
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Another day, another rumour about the flotation of Formula One which now seems to be on the back-burner as a result of the turmoil in the world's stock markets.
Today's rumour comes from none other than Sky News' business blogger Mark Kleinman and it focuses on the thorny issue of a succession strategy for F1's boss Bernie Ecclestone. Kleinman isn't perhaps best placed to talk about F1 succession since the first person he tipped as a "contender to replace Ecclestone" was David Campbell, the former boss of F1's hospitality division Allsport, who resigned a few months ago. He then claimed that former M&S boss Stuart Rose "has been informally sounded out about a senior role at the helm of Formula One motor racing". Kleinman of course was also the man who told us that News Corporation (the media giant which controls the company he works for) was mulling a bid for F1 and Singaporean wealth fund Temasek "is being courted to buy a stake in Formula One.".
These claims were all bundled in articles which were badged as exclusives. None of them came to anything and they aren't the only ones. We aren't denying that Rose may have been sounded out about the senior role or that Temasek was being courted to buy a stake in F1 but given that they came to nothing the news doesn't seem to be particularly valuable. Surely it would be more useful to wait a little while to see whether there is any real prospect of the news coming to something rather than just jumping in straight away and ultimately being proved wrong?
If Pitpass reported all the stories we hear about talks and meetings taking place we would have no time to write up the news which actually comes to something. This news is of course of most value as Pitpass' business editor Christian Sylt pointed out in a comment below one of Kleinman's recent blog entries which contradicted his previous claim about Temasek investing in F1.
One has to wonder why Kleinman writes up claims which are at such an early stage that they may well come to nothing and often don't. Having said that, if enough of these are written then some are bound to come off in the end. It is unclear whether the news in his latest blog entry will come to anything or not but one person who has a good idea about it is Ecclestone.
Kleinman makes two claims. Firstly, he says that Ferrari will "be handed a single share in Formula 1 plc, a nominal investment that will symbolise its enduring importance to the sport." In itself, this seems to be a U-turn on his previous theory that "it is conceivable that as F1's most important team, Ferrari would be handed an interest worth tens of millions of pounds in the event of a sale or stock market listing of F1." One share is almost certainly not going to come to tens of millions of pounds and, as Ecclestone has previously said "the teams can buy shares but they are not going to get given them." Ecclestone has now gone one step further by telling Sylt that "I don't think Ferrari will be handed a single share in Formula 1 plc." He doesn't stop there.
Kleinman also claims that under the teams' current F1 contract, known as the Concorde Agreement, Ferrari has to give its consent if the boss of the sport "has held a senior executive office or an ownership interest of 5 per cent or more in any team or automobile manufacturer which either owns more than a 5 per cent interest in a team or is a supplier of engines to a team."
Quite rightly, Kleinman points out that this effectively gives Ferrari the right to veto a successor to Ecclestone if the candidate had worked for one of its rivals, such as Renault or Mercedes. He adds that under the new Concorde, which will run to 2020, the team will no longer have that explicit right but will have "broader influence" involving a Ferarri director sitting on what is known as the nominations committee along with Peter Brabeck, F1's new chairman; Jean-Marc Huet, the chief financial officer of Unilever; Miguel Ko, chairman of Starwood Hotels & Resorts; and CVC co-founder Donald Mackenzie."
Ecclestone shoots this down by saying "no, Ferrari is not going to get a seat on the committee which decides who should replace me. I don't know what that committee is. It is not about selecting a successor for me."
So, there we go: Sky News says one thing and Ecclestone says another. It doesn't take a genius to work out which of them knows the most about the Concorde Agreement and we will leave it up to readers to decide which view is likely to be the accurate one.