The Road to Mecca
JULY 5, 2002
When The Mole was a lad, Mecca was always used as the name for the place where one wanted to go, where there were piles of gold, endless liquorice and dancing girls. It always amazed The Mole that Paramount Pictures did not make a musical comedy called The Road to Mecca, starring Bob Hope, Bing Crosby and Dorothy Lamour.
In 1938 they discovered oil in Saudi Arabia and, as money began to gurgle out of the ground, the country around Mecca grew to be rich. Very, very, rich. Of course the rulers did not hand out money to everyone but contracts with the Saud Family helped to make many a millionaire. One of the jobs that was needed was to tidy up Mecca and build a road to it. That job went to Bin Laden Construction. The firm is now well known because of the exploits of the disgraced 17th son of construction magnate Muhammad Bin Laden, who has nothing to do with the family business. The trouble in Saudi Arabia is that with multiple spouses (or should that be spice?) and no obvious birth control going on there are lots of people with the same father. Saudi Arabia, in fact, has one of the higher population growth rates in the world. And it is not just the population, the royals have been busy as well. The latest estimates suggest that there are now in the region of 10,000 princes all related the Saud family.
The Mole is not one of the famous British "Arabists" who hang out in the Secret Services, but he likes to keep in touch with developments by reading a publication called "Foreign Affairs", which sounds rather racy but in fact is the magazine that spooks read to tell them where the next war is going to be. The current issue has a very interesting article on the problems facing Saudi Arabia.
Formula 1 has long considered Saudi Arabia to be (if you will pardon the allusion) a Mecca for sponsorship. The only teams which have ever succeeded in getting any serious money there are Williams, which stumbled quite by accident into a sponsorship deal with Saudia Arabian Airlines in 1977. This was owned by the Saud family and this led to the opening of many doors, notably the sponsorship with Albilad, an investment company owned by the family which ended up being the main vehicle for the huge Al Yamama arms deals between Britain and Saudi Arabia. Described as "the biggest sale ever of anything to anyone by anyone" this was worth something in the region of $25bn to Britain. The connection with the Saudi royals also meant that at one point the name Bin Laden did actually appear on the Williams cars. The Arab connection then resulted in Williams getting backing from TAG.
The only other team to get a sniff of Saudi money after that was McLaren when Ron Dennis managed to prise TAG away from Williams with the offer of an engine deal. The TAG McLaren Group remains but otherwise Saudi money has not been evident in F1 circles.
However almost anyone with a Middle Eastern appearance could turn up in the F1 paddock and be treated royally if they were to mention that they had connections in the Saudi Arabian government. Such people (and those claiming to represent them) have been turning up in F1 on and off over the years.
The Mole remembers very well the case of Sulaiman Al-Kehaimi who for a while in 1996 seemed to be the saviour of the Tyrrell team but was later found to have been rather less of a player than he appeared to be. When it all went to court he was found to have debts of $160m, which would make even The Mole's bank manager wince slightly.
Thus the talk of a possible buyout of Minardi by Saudi interests is interesting. HRH Prince Al Waleed bin Talal bin Abdul Aziz Al Saud is, as his name suggests, a Saudi royal, one of the thousands of cousins of King Fahd. The thing that makes Al Waleed interesting is that he is enormously wealthy. In fact he is one of the richest men in the world.
The Prince's Kingdom Corporation controls Citibank (just for starters), owns part of the Daewoo and Proton car companies, TWA, Newscorp, Kirch, Eurodisney, AOL Time Warner, half the hotels in the world, Netscape, Apple Computer, Motorola, Planet Hollywood and a bunch of other companies that not even The Mole's cohorts can keep track of. Spending two or three hundred million dollars is nothing sensational for Prince Al Waleed.
We know he is real because his son Prince Khaled appeared last year at the Italian GP and was hanging around with Mansour Ojjeh (of TAG) who would know a fake Saudi prince if he met one. This was the real thing.
You would think then that Al Waleed would not baulk at buying a small Formula 1 team like Minardi, throwing in a bit of sponsorship and taking it up through the sport, using it to promote his other investments. But Al Waleed has not put up any money yet.
The prince did not build his empire on oil money. He started with almost nothing and built up his empire by investing cleverly. He is a great believer in buying a bargain. His joy is to find good companies that are in trouble and undervalued. He turns them around and makes a killing. But the deals have to make sense to the Prince and his advisors. He is not a soft touch.
The question which needs to be answered therefore is whether or not Minardi is a bargain. To establish that the Prince will need to look at the state of the industry as a whole. In theory a Formula 1 team has considerable value but until the current commercial battles are resolved no-one is going to make much out of buying and selling racing teams.
The Mole hopes that this is all sorted out as nothing would give him more pleasure than to see Minardi go to the front of the grid.
That may sound absurd but one should remember what Williams was like before the Saudis arrived.
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