Formula 1 Sold for $3 Billion?


Tuesday November 29 2005

Bernie Ecclestone is already one of the richest men on the planet - and he's just got significantly richer...

The news on Friday that Bernie Ecclestone had sold his stake in SLEC, the company that controls F1’s commercial rights, was very interesting. Bernie was said to have sold his 25% stake in SLEC handing over ownership to a previously little-known private equity group CVC Capital Partners.
The minute you mention FIA and FOM and SLEC most F1 fans eyes begin to glaze over, but there is a lot more to this story than meets the eye.
Either it’s the first stage in allowing the major motor manufacturers to buy SLEC and hence prevent a split in the sport in 2008 – or it’s another example of Bernie managing to dispose of an asset at top dollar before things go pear-shaped.
Ever since his days selling motorbikes in Kent, Bernie has had a happy knack of doing the right deal at the right time. He sold his F1 digital TV package to the French station Canal + and made millions from it (they lost millions).
When he ditched the idea of an F1 flotation on the stock market he managed to sell 75% of the SLEC shares to German TV mogul Leo Kirsch for $1.6 billion. Kirsch, who was trying to convert F1 to a pay-per-view sport for the Schumacher-crazy German public, went bust and the three German banks that lent him the money suddenly became major players in F1.
Time after time Bernie has got grand prix promoters to stump up the maximum amount of cash for races. We’ve seen in the news today that the Belgian GP promoter has gone bust with a shortfall that the Wallonian government are reluctant to make up for.
Now it’s reported that Bernie has sold his remaining SLEC shares, along with 51 per cent of the German Bayerische Landesbank’s holding for a massive $3 billion ($1.75bn) to CVC Capital Partners.
Bernie was said to be "very happy" with the deal and you can understand why.
Judging from his previous mega deals either he’s managed to get shot of a major asset just before he knows it’s all going to fall apart (and the big five motor manufacturers leave F1 with just Ferrari and Red Bull). Or…
CVC Capital Partners are acting for the major motor manufacturers and what we are witnessing is a transference of ownership. Which would mean that F1 will stay as we know and love it.
The FIA have ultimate say in all of this because as owners of the F1 series, part of the commercial/TV rights deal is they get to judge whether the owner of SLEC is a fit and proper owner. They clearly believed that the man behind The Muppets in Germany was the right sort of owner because he had $1.6 bn and no doubt they’ll like CVC even more because they have $3.3 bn.
Whoever gets ultimate control of F1 – the big car manufacturers, or some major capital investment group - you can bet one person will not lose out.
Bernard Charles Ecclestone – he’s gone about making up for the UK pensions shortfall in his own special way.