Would FOM welcome EU interference?
FIA. Other teams don’t get a look-in unless a motion passes said Strategy Group, and even then they are generally outvoted.
So skewed is F1’s current revenue structure that Ferrari will annually be guaranteed larger slices of F1 revenues than Lotus, even if both red cars were to retire in the rst corner of the opening lap of every round through to 2020, and the black/gold team were to win both titles for six straight years.
In other words, if McLaren-Honda fail to score a podium this season – as could be the case going off current performance – and Sauber bags one every time of asking, Woking will still top Hinwil in the money stakes. Non-CCB teams suspect these arrangements to be in (potential) breach of EU competition/ monopoly laws, while other sources suggest ex-FIA president Max Mosley, said to be rather disillusioned about the governing body’s management of F1, has shown a keen interest in the situation. Indeed, some suspect the former barrister, pushed aside in 2009 during a teams’ revolt, to be the orchestrator… Why, though, is our man so adamant that CVC – or, for that matter, FOM’s ultrasecretive CEO Bernie Ecclestone – would welcome an investigation? All logic dictates that the venture fund should harness its considerable powers to prevent Brussels bureaucrats delving into its innermost secrets.
The answer lies in Singapore, or once did. It is fact that CVC acquired F1’s commercial rights in 2005/06 with a view to oating FOM – as per their modus operandi, whether with their Samsonite luggage investment, or Belgium’s postal service. At the time F1’s numbers were buoyant, with CVC later placing (rather optimistic) valuations of $10bn, or ve times the mainly leveraged purchase tag.
To boost F1’s IPO value CVC desperately needed long-term stability – particularly after manufacturer teams departed in droves in 2008/09 – and when the 2013-20 Concorde Agreement was negotiated in early 2012, FOM offered substantial premiums to CCB teams in exchange for their commitment through to 2020. Once they had been snared, the rest had no choice but to accept meagre pickings.
“We were given the FIFO option – ‘Fit in or fuck off’,” is how one non-CCB team boss described the process.
All this, though, was before the infamous ‘Munich Matter’: Ecclestone paid $60m to settle bribery and embezzlement charges, which tainted the offering. In addition, F1’s demographics plummeted: Despite preotation claims of 25 races per season, FOM battles to maintain 20-round championships, with TV viewership dropping 30 per cent over ve years. Live audiences? Ask Germany…
So CVC’s IPO plans were shattered, leaving them no option but to dilute their 67 per cent holding in FOM – half their shares have been sold to institutional investors. Yet, in terms of the CCBs, FOM shell out $150m a year to them while unable to impose their regulatory will. Equally, so high are loan repayments that FOM cannot increase disbursements to beleaguered mid- and back-gridders.
Thus, says our source, CVC will welcome an investigation that nds F1’s structures to be in breach, for that would force the CCBs to waive premiums on the basis of an EU directive – leaving them without recourse – and enabling FOM to increase disbursements to Sauber, Force India and Lotus.
Should all this get too much for publicity-shy CVC, their owners may elect to dump F1 – having made a cool $3bn over eight years in the process – and hand control back to Ecclestone, who would no doubt rope in his old mate Max Mosley to revise F1’s governance...