13/04/2014
NEWS STORY
Bernie Ecclestone has poured cold water on the idea that Formula One's teams may be buying into the sport according to a revealing article in the Mail on Sunday by Christian Sylt.
Amongst the revelations, Ecclestone discloses that he once tried to buy luxury department store Harrods but it is his comments about the future of F1 that will make the sport take note.
Last week the Financial Times quoted Ecclestone, who has a 5.3% stake in the sport, saying that he "would like to get back to" a plan drawn up some years ago for him and the teams to become controlling shareholders of F1. "We'd certainly want control," he reportedly said. However, on the same day that the report was printed, Ecclestone was interviewed on Sky Sports by Martin Brundle and said it is "nonsense" that he wants to take over F1.
He reiterated this in an interview with Bloomberg earlier this week but confirmed that a group of F1's 11 teams is in discussion about buying a stake in the sport. Any transaction would require consent from the private equity firm CVC which controls F1 and has the right of first refusal if any of its shareholders want to sell. Ecclestone has now revealed that it isn't likely CVC will sell and this is no surprise.
F1 has been one of CVC's best-performing assets and it has made around £2.4bn in dividends and share sales from its initial £582.6m investment. It holds a 35% stake and planned to exit in 2012 through a flotation on the Singapore stock exchange which stalled due to the eurozone crisis.
"Maybe CVC will still try and float. They are in no hurry to sell. I get the impression they don't want to get rid of F1," says Ecclestone.
Earlier this year it came to light that American media mogul John Malone's Liberty Group had teamed up with Discovery Communications to consider bidding for F1. However, the brakes are on the float as F1 awaits the outcome of a bribery trial against Ecclestone in Munich which will begin later this month.
The trial was sparked by a £26.5m payment made by Ecclestone and his Bambino family trust to Gerhard Gribkowsky, former chief risk officer of German bank BayernLB. In 2006 Gribkowsky was responsible for selling a 46.7% stake in F1 owned by BayernLB. German prosecutors believe that the £26.5m payment to him was a bribe to steer the stake to CVC as it had agreed to keep Ecclestone in F1's driving seat.
Ecclestone denies the charges. When the bribery trial was announced in January he resigned as a director of F1's parent company Delta Topco but he still runs the sport on a day-to-day basis.
In February he won a related case in London's High Court in which he was accused of undervaluing F1 through the alleged bribe because other bidders may have paid more than CVC. The judge, Mr Justice Newey, ruled that Ecclestone did not believe the shares were sold below market value. However, he said that Ecclestone paid a bribe to ensure that the shares were "transferred to someone more congenial to him." He added "I am afraid that I find it impossible to regard him as a reliable or truthful witness."
Ecclestone is concerned that the comments could colour the opinion of the judge in Munich but says he is confident that the truth will come out in court.
He turns 84 in October yet despite his advancing age, and the risk that he could be imprisoned in Germany, he has no successor.
Outgoing Sainsbury's boss Justin King and Premier League chief Richard Scudamore have both been rumoured as replacements but Ecclestone says he has had no suggestion that CVC is trying to find a successor. "I'm happy with CVC," he says.
Replacing Ecclestone would be a tough task says Alejandro Agag, chief executive of Formula E, the electric racing series which launches in September. "This is no comparison to Formula One," he says. "It is a micro version but I keep thinking how does Bernie do it? I delegate like crazy, I have a huge team of people here doing a bunch of stuff but he does it all. The capacity of that man is just incredible."
Ecclestone says that resigning as a director of Delta Topco makes little difference. "Me stepping down from the board just means that I can't [get the company to] buy something like Harrods without getting board permission. It is no coincidence that he uses it as an example as Ecclestone adds "I tried to buy Harrods a long time ago when Mohamed al Fayed wanted to sell it. It's an institution. If I could have bought it at the price I wanted I would have done. It's like a religion."