JUNE 12, 2008

The F1-FIA plot thickens - or does it?

Bernie Ecclestone has written to all the FIA club presidents saying that he wishes to clarify the current situation, blaming confusion on the media - a regular thing in F1 circles.

He says that "the position of Formula One Management and the teams and the Formula 1 promoters is very simple. They would like a Concorde Agreement signed in basically the same format as in the past agreements".

Ecclestone goes on to say that "a number of manufacturers and teams along with their sponsors have stated that they thought the president should step down because of matters in his private life. This is their and only their opinion as they are not part of the FIA and therefore do not have votes".

He adds that Max Mosley has been a friend for 40 years and "hopes that he still is". He concludes by saying that Mosley has "in his way carried out many matters which have been beneficial to the FIA and should be appreciated for this".

It is not clear what this letter hopes to achieve, beyond being slightly more conciliatory than some of the statements attributed to Ecclestone in recent weeks.

What is interesting is that the letter coincides with new rumours that suggest that CVC Capital Partners may be involved in preliminary talks with Rupert Murdoch's News Corp about selling its shares in the Formula One group, presumably by way of the ultimate holding company at the moment, Delta Topco. This is a Jersey-based company which is 70% owned by CVC with other shares belonging to JPMorgan, Lehman Brothers, the Ecclestone Family trust Bambino and Bernie Ecclestone himself.

In the current circumstances, it is hard to know whether any rumour can be trusted because there are all manner of propaganda wars going on to create impressions that may or may not be true. Rather than try to analyse whether this is right or wrong, it is probably best to simply state that the rumour exists.

It is certainly an interesting and logical idea as News Corp is one of the few companies that might be able to generate more revenues from the sport, because it owns and operates not only TV stations but also satellite TV networks such as Sky and Star. These allow the company to broadcast its own programming without having to rely on other TV companies for delivery or for content.

This could mean that the various News Corp stations could generate the advertising revenues associated with F1 without needing to use the traditional broadcasters, which currently pay for the TV rights but then make their money back and generate profits by selling advertising.

There are any number of implications of such a deal, not least that News Corp owns the News of the World newspaper, the publication that exposed Max Mosley's recent escapades and it is now heavily involved in legal action with the FIA President.

The FIA has a controversial veto clause in its contract with the Formula One group that allows it to refuse a change of ownership if it does not like the buyer.

The rumour may be a complete fabrication by people trying to create perceptions about the Mosley Scandal, but it is not easy to know fact from fiction at the moment.