CVC buys majority stake in Formula One
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  1. #1
    1000+ Posts purrr-geot's Avatar
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    Default CVC buys majority stake in Formula One

    http://msnbc.msn.com/id/10201746/

    CVC buys majority stake in Formula One

    Bernie Ecclestone and German bank BayernLB have agreed to sell control of Formula One to CVC Capital Partners, the private equity group, for an undisclosed sum.

    Mr Ecclestone will remain chief executive of the car-racing series that he built into a global phenemon that now attracts audiences of 150m viewers and generates estimated revenues of more than $600m a year from media rights and commercial activities.

    "We are delighted to have CVC as a shareholder whose long-term strategies and vision will provide the stability for teams, promoters and manufacturers," Mr Ecclestone said. "They are knowledgeable about motor sport and make an ideal partner for Formula One."

    The move comes as motor racing battles to resolve long-running disputes that have threatened to split the sport into two rival series, with five car makers involved in the sport saying they will launch a rival series in 2008.

    Manufacturers have been looking for a larger proportion of Formula One's revenues, and also want changes made to the corporate governance of Formula One. The so-called Concorde agreement, which governs financial and other relationships in the sport, expires in two years' time.

    CVC said it was committed to a flourishing and successful Formula One world championship. "CVC has given its full support to the current discussions between Formula One, the teams and manufacturers to enable a successful extension of the current Concorde Agreement."

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    Mr Ecclestone owns a 25 per cent stake in Slec Holdings, which controls Formula One, via a family trust. The other 75 per cent is held by BayernLB - which owns 48 per cent - JPMorgan and Lehman Brothers. The three banks inherited the stake after the collapse of Kirch, the German media group.

    Formula One has been the subject of takeover speculation for several months. In August, Hutchison Whampoa, the media group controlled by Li Ka-shing, confirmed it had been in talks with Mr Ecclestone.

    CVC owns Dorna, the company that organises and manages the commercial rights of the equivalent of Formula 1 for motor bike racing, and it also controls the Automobile Association, the roadside breakdown service.

    Copyright The Financial Times Ltd. All rights reserved.

  2. #2
    Fellow Frogger! PLAYLIFE's Avatar
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    I didn't know CVC owned Dorna.

    Up until a few years ago, Dorno were all over the shop. Whoever owns or runs motorsport is always going to be looked at critically by everyone, not to mention there is always hidden agendas behind decisions too.

    Don't know if this is good or bad, time will tell I guess.
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