Features - News Feature
MARCH 7, 2002
Who owns what in Formula 1?
BY JOE SAWARD
With each passing year there seem to be more men in suits in the Formula 1 paddocks. Some of them are bodyguards, cruising along become politicians, but most are lawyers and bankers. Now car manufacturers are becoming increasingly involved. But who owns what? And who are the powers behind the thrones?
These are the details:
The major player is SLEC, a trust company which is the holding company of the Formula One group of companies. This holds the commercial rights to Formula 1 racing. SLEC is controlled by Bernie Ecclestone thanks to a shareholders' agreement but Ecclestone Family-controlled trusts own only 25% of the shares of the company. The remaining shares are owned by the Kirch Group although around 16% of the SLEC shares are still nominally owned by EM.TV as Kirch has yet to complete his purchase of these. EM.TV cannot sell these shares to anyone else at the moment.
Scuderia Ferrari Marlboro
Ferrari is owned by the Agnelli Family, which is also the owner of Fiat. Ferrari is usually linked to Fiat but is in fact a different company. The ultimate control of the company rests with Gianni Agnelli, the 80-year-old patriarch of the family, who is the grandson of the founder of the Fiat car company. Agnelli, known in Italy as "the Avvocato", is one of the world's leading industrialists and chairman of Fiat between 1966 and 1996. Although he has now retired Agnelli continues to be closely involved in Ferrari's F1 program, having long been a supporter of Ferrari President Luca di Montezemolo.
The Agnelli's acquired 50% of Ferrari in 1968 with an agreement that when Enzo Ferrari died another 40% of the firm would come under the control of the Agnellis. The remaining 10% are held by the Ferrari family. Ferrari died in 1988 and the shareholding in Ferrari has remained the same except that in 1996 three percent of the Agnelli shares were sold to a consortium of banks. The following year Ferrari acquired the Maserati company and is in the process of rebuilding as Ferrari does not wish to expand too much and ruin the exclusive image of being a Ferrari owner.
West McLaren Mercedes
McLaren International is the Formula 1 team belonging to the high-technology TAG McLaren Group. This now has a number of related companies including a state-of-the-art electronics business; a marketing company and a car production form which is building the new Mercedes-Benz SLR sportscar. In the middle of 1999 DaimlerChrysler AG acquired a 40% shareholding in the team - 30% from TAG's Mansour Ojjeh and 10% from team boss Ron Dennis. This leaves Ojjeh with 30%, Dennis with 30% and DaimlerChrylser with the rest. There are believed to be shareholders agreements which mean that Dennis remains in total control of the team but these are naturally confidential.
TAG, or Techniques Avant Garde SA to give it its proper name, is a Luxembourg-based company owned by Mansour Ojjeh and his brother Aziz. Ojjeh has been involved in F1 since he became a sponsor of Williams in 1979. In 1982 he switched his support to McLaren and spent an estimated $5m to pay Porsche to design and build TAG turbo engines for Grand Prix racing. At the end of 1984 Ojjeh bought 60% of the McLaren company, which has expanded into the group.
TAG is also involved in selling and leasing executive jets through its TAG Aeronautics subsidiary, which is a market leader in Europe and the Middle East, while there are is also considerable TAG investment in agriculture, property development and banking. TAG was also instrumental in the revival of the Heuer watch company, although TAG-Heuer is now independent of the main TAG group.
BMW Williams F1
Williams Grand Prix Engineering was established at the end of 1977 with Frank Williams owning 99% of the shares and his wife Ginny holding the remaining one. This remained unchanged until 1988 when Williams agreed to give up 29% of his shares and Ginny Williams gave up her percentage and these were given to team's technical director Patrick Head. This cemented one of the most famous alliances in F1 history. Williams and Head remain in full control of the team - with no outside influences at all.
Peter Sauber built his first racing car in 1970 and enjoyed increasing success in sportscar racing for the next 20 years, initially with BMW engines and then with Mercedes-Benz. Eventually he convinced the Stuttgart company to return to racing and Sauber-built Mercedes sportscars won four World titles and the Le Mans 24 Hours.
Sauber had hoped to take Mercedes into F1 but in November 1991 the company voted against an F1 program. Sauber went ahead by himself, although he did receive financial and technical support from Mercedes-Benz. Sauber hit trouble at the end of 1995 until Lichtenstein businessman Fritz Kaiser negotiated a deal in which the Red Bull drinks company - owned by Austria's Dietrich Mateschitz - joined forces with Sauber to establish a holding company called Red Bull Sauber Holding. This purchased the Sauber F1 team and while Mateschitz owns 51% of the shares, Peter Sauber retains control over the majority of the voting rights of the team. The remaining shares were split between Sauber and Kaiser but the latter sold his shares back to his partners at the end of 1999: half to Sauber and half to Mateschitz. This meant that Mateschitz owned 63.25% of the team with Sauber holding 36.75%. A few months ago it was announced that Sauber had paid $44m to buy out Mateschitz and then sold the shareholding on to Credit Suisse, which plans to sell them to individual investors. Peter Sauber retains the voting rights and so controls the team.
DHL Jordan Honda
Eddie Jordan created Eddie Jordan Racing to run a car in the British Formula 3 Championship in 1980 and for 10 years worked his way through Formula 3 and Formula 3000. Having won in both Jordan then embarked on an F1 program and at the end of 1989 set up Jordan Grand Prix Ltd. which was wholly-owned by a Eddie Jordan Holdings. This in turn was owned by a family trust company in the tax haven.
The team entered F1 in 1991 and the ownership remained unchanged until November 1998 when Jordan agreed to sell 40% of the team to the venture capitalist company Warburg, Pincus & Co for $60m. Jordan retains the other 60% of the team.
Lucky Strike BAR Honda
BAR was launched in December 1997 with British American Racing controlling 50% of the shares in the team via a subsidiary called BAT (Westminster House) Ltd.. Around 35% of BAR is owned by an American company called Mount Eagle Inc. This is controlled by Craig Pollock but has a variety of "sleeping partners" including CART team owner Jerry Forsythe and, rumor has it, Jacques Villeneuve. Fourteen percent of the team is owned by Adrian Reynard while the remaining one percent is believed to be split between Rick Gorne and Malcolm Oastler. Management control of the team rests with David Richards and it is believed that his Prodrive company has options to buy BAT's shares and control of the team at some point in the future.
Mild Seven Renault F1
This team can be traced back to the early 1970s when Ted Toleman first became involved in racing. Toleman Motorsport won the European F2 title in 1980 with its own car and entered F1 in 1981. The team did well initially but by 1985 was in trouble financially and was sold to the Benetton Family in May that year. The team's name was changed to Benetton Formula and the new team was officially launched in February 1986. It was owned by Benetton Family holding companies until early in 2000 when it was sold to Renault for $120m. As part of the deal Renault agreed to continue the team as Benetton until the end of 2001. Now Renault F1 is wholly-owned by Automobiles Renault.
Established as Stewart Grand Prix in 1995, the team was owned by offshore trusts controlled by Jackie Stewart and his family. The team was bought from the Stewarts in June 1999 by the Ford Motor Company for an undisclosed sum of money, believed to be around $70m, and it became Jaguar Racing at the start of 2000.
The Arrows team was established in 1977 by Jackie Oliver, Alan Rees and three colleagues. The other sold their shares and eventually Oliver and Rees became 50-50 partners in the team. In the early 1990s they leased the operation to Japanese businessman Wataru Ohashi of the Footwork Corporation. When he ran into financial trouble, they bought the team back for a fraction of what Ohashi had paid. In March 1996 Tom Walkinshaw acquired a controlling interest in the team. The team was moved to Leafield. The team financial trouble in 1998 and at the end of the year Walkinshaw restructured selling 60% of the shares to British-based Nigerian called Malik Ado Ibrahim and to Morgan Grenfell Private Equity Ltd., a subsidiary of Deutsche Bank. Walkinshaw retains 40% of the team. The other 60% are now owned by Deutsche Bank but as Walkinshaw owns the voting shares the bank has no control over the team.
KL Minardi Asiatech
Giancarlo Minardi has run the racing teams since 1972 and in 1979 he decided to build his own cars under the Minardi name. The team ran into financial trouble in the early 1990s and 49% was sold to Scuderia Italia shareholders. The team went through a variety of different ownership consortia but was finally reorganized under the control of Gabriele Rumi. At the start of last year the whole business was sold to Australian aviation magnate Paul Stoddart for a rumored $30m. Stoddart owns 100% of the shares.
Panasonic Toyota Racing
The history of Toyota Motorsport can be traced back to the autumn of 1972 when rally driver Ove Andersson first drove for Toyota in the RAC Rally. That winter he established Andersson Motorsport in his native Sweden and began running the Toyota rally program. This was not very practical and in 1975 the team moved to Brussels in Belgium where it became Toyota Team Europe, funding coming from Toyota dealers around Europe. In 1993 the Toyota Motor Corporation bought the team from Andersson and it became Toyota Motorsport GmbH. This organization continued in rallying and was briefly involved in sports car racing as well, until the end of 1999 when it began to concentrate all efforts on its F1 program. The team was launched into F1 this year after two seasons of preparatory work. It is wholly-owned by the Toyota Motor Corporation.