A war for the control of F1 Management has been again emerged and this time it seems that battles will be titanic. News Corporation owned by media mogul and self-described “billionaire tyrant” Rupert Murdoch confirmed that has been allied with Agneli's Exxor in an attempt to investigate a potential takeover of F1 management from Bernie Ecclestone and CVC Capital Partners.
A fortnight ago reports suggested that Rupert Murdoch has been actually allied with Mexican billionaire Carlos Slim who sponsors Sauber F1 Team, in order to launch a co-bid for the F1 management, but now it seems that Exor investement firm, seems to have circumvented that. In fact, Exor, which is listed on the Borsa Italiana, is controlled by John Elkann, scion of the Agnelli family and is a major shareholder in Fiat Group (30% stake), the giant car manufacturer that owns the Ferrari, Maserati and Alfa Romeo brands and Juventus F.C. (60% stake).
Meanwhile, News Corp. is a major television company in many of F1’s biggest markets in Europe and Asia. However, it mostly operates pay-TV systems, while F1 participants have pledged to appear on free television broadcasting, where sponsors can reach the largest audiences.
Nigel Currie, director of BrandRapport commented:
“I can’t see how they could take over without changing fundamentally how the sport is run. The whole basis of sport is that there is a rights holder who sorts out the broadcasting deals, the sponsorships, the merchandising, everything else associated with it.”
A statement from Exor has been announced as follows:
"Exor, one of Europe's largest listed investment companies, and News Corporation, the global media group, confirm that they are in the early stages of exploring the possibility of creating a consortium with a view to formulating a long-term plan for the development of Formula One in the interests of the participants and the fans. Over the coming weeks and months, Exor and News Corporation will approach potential minority partners and key stakeholders in the sport. There can be no certainty that this will lead to an approach to Formula One's current owners."
The current ownership structure of F1's commercial rights is complex but the majority is owned by CVC Capital Partners and it is run by Bernie Ecclestone. CVC, which purchased its holding for £1.8 billion in 2006 and owns MotoGP TV rights as well, confirmed that it has been approached, by Rupert Murdoch's son James who is the representative of News Corporation.
"CVC can confirm that it has recently received an approach from the EXOR News Corporation consortium. James Murdoch has informed us that the approach is friendly, at a very preliminary stage, and that they acknowledge that Formula One is privately owned by CVC and not currently for sale.
CVC recognises the quality of Exor and News Corporation as potential investors, but any investment in Formula One will require CVC's agreement and will need to demonstrate that it is in the interest of the sport and its stakeholders, taken as a whole."
Although Rupert Murdoch's News Corporation and Agnelli's Exor confirmed that they were considering forming a consortium to mount a possible takeover bid,
Bernie Ecclestone has played down reports stating in Guardian that F1 is not for sale and expressed great surprise that neither News Corporation nor Exor had made enquiries to see if a sale was possible. Yet, he maintained that a sale is unlikely unless News Corporation and Exor or anyone else are willing to pay over the odds.
"You would think if somebody wanted to buy it they would approach the people who own it to see if they want to sell it. Personally, I know CVC don't want to sell, so it's going to be a bit difficult. I can see CVC in for the long haul, absolutely, 100%.
If somebody came along and offered them a lot more money than it's worth, they would obviously say: 'Sit down, let's have a chat.' But I get the distinct feeling that's not going to happen.
I can't understand why a company as big as News Corp need to keep looking for partners. First it was Carlos Slim, and now we've a new one."
On the other hand, FOTA keep their eye close to the latest news and F1 biggest teams have scheduled a meeting in Stuttgart in order to discuss the future of the sport. The meeting was reported by the Daily Telegraph but also Sky News' city editor Mark Kleinman, who has been very well-informed so far on the possible Rupert Murdoch-led takeover of Formula One.
While the governing Concorde agreement concerning FOTA'S TV rights share expires at the end of 2012, BBC pundit and former team owner Eddie Jordan thinks there is a lot of "posturing" going on at present and FOTA will be highly interested to re-take in a sort of way the control of F1 rights back from Bernie Ecclestone.
A Ferrari-linked company has confirmed it is allying with News Corporation in the consortium, and Italy's Autosprint says it is "absolutely conceivable" that the likes of McLaren and Mercedes might also get involved.
Telegraph's Tom Cary reports about the Stuttgart meeting will involve Ferrari, McLaren, Mercedes and Red Bull and the latter three teams may "investigate the possibility of joining the consortium themselves."
Ferrari has already reacted to the reports that a company linked to its carmaker parent Fiat was involved in the potential F1 takeover and has recently been highly critical of the current state of F1, such as the emphasis on aerodynamic development. Moreover, Ferrari team boss Stefano Domenicali suggested that the negotiations about the new Concorde Agreement are soon set to step into a higher gear.
"We have no comment to make, partly because we are not directly involved at the moment. All we can do is repeat what has already been said so often in the past — Ferrari stresses the importance of ensuring the long-term stability and development of Formula One... If Formula One is interesting in the future for manufacturers we need to ensure that all the elements of motor racing are there in equal measure."
And McLaren's Martin Whitmarsh told Sky News: "I think whoever owns the sport in the future, be that the current owners or new owners, it's just important that the teams are more cohesive than they have ever been."
Autosprint magazine suggested that the teams are indeed setting out plans for simple and stable rules post-2012, the revival of key European venues, reduced ticket prices and the modernizing of media platforms for the younger audience.
