Matters of Moment, July 2011

Pie in the sky? Perhaps not…

Formula 1 is “currently” not for sale. So says CVC Capital Partners, the private equity firm which owns a 100-year lease on the commercial rights of Grand Prix racing. But in the future? CVC exists to make money and that is the only reason it has bought into F1. Consider the old adage that everything is for sale at the right price. By the nature of its business, it’s hardly likely that CVC will see out the full term of its lease given its nominal and extreme length — so of course F1 is for sale.

So should we really take seriously a joint bid for the sport by a consortium fronted by media giant News Corporation and Exor, an Italian investment company that essentially owns Ferrari? Absolutely we should, even if we are only at the beginning of what will be a drawn out process of rumour, negotiation and political manoeuvring.

As you can read in The Motor Sport Month overleaf and in Nigel Roebuck’s Reflections on page 26, there are too many questions to draw real conclusions on this one right now, although the teams and manufacturers are sniffing a bargaining tool to grab more control of the sport and its revenues. But the main question we can legitimately ask is, would it be a positive thing for a media company to run F1?

The answer is yes, probably — but it could make for some sticky problems. News Corp, through its BSkyB TV empire, has redefined the global power and reach of sport, as we have seen most obviously with English football, which was in poor health before the advent of the Premier League. BSkyB raised the game to new levels because it had an agenda to invest, and it could do the same for motor racing — in polar opposite to CVC. The vulgarities and excesses of the Premiership are the price football has paid — but then Grand Prix racing is already bursting with such indulgence, so no change there!

Our reservations are that a consortium-led F1 would be vulnerable to the many vested interests that would be holding the keys. Would the team unity we see existing within the Formula One Teams’ Association really survive? And of course with BSkyB comes the fear of losing free-to-air TV coverage. As Bernie Ecclestone found to his cost with his digital TV project in the late 1990s, subscription-only doesn’t work for F1. We spare a thought too for the BBC, which has done such an excellent job with its coverage these past few seasons. Its contribution should not be forgotten in the coming year, once negotiations truly kick in.

So who will be the pivotal player in this game? He’s only an employee of CVC these days, but Ecclestone will have a few more hands to play before he’s finished. Meanwhile, much rests on the FIA president. Jean Todt’s governing body has the right of veto on any sale. If he blocks the Murdoch family’s ambitions, Luca di Montezemolo’s threat of a breakaway might gather true pace. Yes, we’ve heard it before and one always expects a deal to be struck in the end. But Todt vs Montezemolo? There’s no love lost between Ferrari’s old sporting director and his former boss. Expect fireworks before the end of 2012.

The wraps are off McLaren’s new GT3 racer (see p124), while Jaguar’s C-X75 supercar developed with Williams will also hit the track some time after its 2013 launch. You can see where it’s heading, can’t you? It’s got to be Le Mans. As many of you have told us recently, the 24 Hours continues to inspire more than any other modern race. The world’s biggest car giants clearly share your enthusiasm. From where we’re standing, Le Mans is already great — and it’s only going to get better.
Damien Smith, Editor