F1 owners offer Ferrari a shareholding from 2013 to 2020

[Brogan]

Breaking news on Sky, FOM have offered Ferrari a shareholding in the sport as part of new commercial deal from 2013-2020.

Will update the thread as more information becomes available.

Edit: Here's a link http://blogs.news.sky.com/kleinman/Post:a5704036-4f6a-41de-a07a-04c2b37b3a7f

And a quote:

According to the papers, parts of which I’ve seen a copy of, Ferrari would be eligible to apply for a share in F1’s holding company by virtue of its status as the team which has competed in the highest number of seasons since 1950. Although it’s unclear from the document whether this share would have anything other than a symbolic value, it is conceivable that as F1’s most important team, Ferrari would be handed an interest worth tens of millions of pounds in the event of a sale or stock market listing of F1.

“The Commercial Rights Holder shall procure that Holdco grants to [Ferrari] the right during the term [2013-2020] to apply for the allotment to it of (and upon such application to be allotted) one redeemable ordinary share of $0.01 in the capital of Holdco (the LST share) for cash at par subject to Holdco’s articles of association,” the document says.

 

[mjo]

Very interesting, probably to tie Ferrari down to the sport long-term.

 

[no-FIAt-please]

Can't find the article?

Interesting how it is only Ferrari that have been offered such a position. I also wonder what percentage is available to them. I bet FOTA wish Ferrari hadn't left them more than ever now.

 

[Brogan]

I have updated the first post with a link.

Essentially Ferrari and Red Bull will be offered shares and to join the board as they're not part of FOTA.

So this is Bernie's latest attempt to break FOTA up.

 

[no-FIAt-please]

Well Red Bull and Ferrari's separation from FOTA becomes clear. Although the article states that the documents have been circulated to F1's "leading constructors", one would assume that would include McLaren and Mercedes. Interesting that the agreement sees only 47.5% of the prize money go to the teams, a small increase.

 

[tranquility2k9]

I have updated the first post with a link.

Essentially Ferrari and Red Bull will be offered shares and to join the board as they're not part of FOTA.

So this is Bernie's latest attempt to break FOTA up.

So Red Bull who have only been in the sport a few years and have no history or heritage get shares in F1 but McLaren, Williams, etc, do not? Wow. What a load of bull****

 

[tooncheese]

I have updated the first post with a link.

Essentially Ferrari and Red Bull will be offered shares and to join the board as they're not part of FOTA.

So this is Bernie's latest attempt to break FOTA up.

HRT should be cashing in soon. Not only were they the first to leave, but they also are a very important and competitive team with lots of heritage.

 

[no-FIAt-please]

So Red Bull who have only been in the sport a few years and have no history or heritage get shares in F1 but McLaren, Williams, etc, do not? Wow. What a load of Red Bull****

Fixed.

 

[siffert_fan]

It looks like the Red Bull shares result from its WCC two years in a row. Any team that acheives similar resultse will get the same benefit. That seems reasonable to me-it pays for performance, not glorious past. The Ferrari hand-out is different. However, as the article says, it may all be little more than symbolic.

 

[Galahad]

More clever tactics from Ecclestone. The customer car regulation looks like being one of the main sticking points before the others sign up (and 47.5% is well below what FOTA were apparently looking for).

 

[the_roadie]

If this turns out to be true you'll be able to hear the rest of the team owners, team principals, and other genuine F1 stakeholders mumbling.
They can't do anything else because they've been kicked in the teeth.

Divide and conquer, works every time, though to be fair to Bernie the teams were all mugs to let him get away with mugging them.
Again.
And it's still within living memory !

 

[Brogan]

As I anticipated, that blog entry covering the story has suddenly disappeared.

Good job I copied and pasted the content into a text file, just in case

 

[siffert_fan]

It looks like all of those provisions are in the proposed Concorde Agreement that will cover the period 2013 to 2020. I don't think the agreement has been approved by all of the teams yet, so none of it is cast in stone at this point.

 

[jez101]

And a quote:

According to the papers, parts of which I’ve seen a copy of, Ferrari would be eligible to apply for a share in F1’s holding company by virtue of its status as the team which has competed in the highest number of seasons since 1950. Although it’s unclear from the document whether this share would have anything other than a symbolic value, it is conceivable that as F1’s most important team, Ferrari would be handed an interest worth tens of millions of pounds in the event of a sale or stock market listing of F1.

“The Commercial Rights Holder shall procure that Holdco grants to [Ferrari] the right during the term [2013-2020] to apply for the allotment to it of (and upon such application to be allotted) one redeemable ordinary share of $0.01 in the capital of Holdco (the LST share) for cash at par subject to Holdco’s articles of association,” the document says.

Delta Topco had 1,007,973,294 ordinary $0.01 shares issued on 1st January 2011 according to their annual return.

One ordinary share is symbolic.

As for 47.5%, Bernie is again having the proverbial laugh. He has been paying teams more than than over the last four years because he has been topping up the usual fees with $36m a year (to share) for the 2004-07 seasons. The accounts say that in 2010, FOA paid the teams $658m on turnover of $1,082m. And that doesn't include the trackside advertising revenues which are reported to add $275m t/o and $225m profit.

I'm putting this down to posturing. It's not aimed at Ferrari or Red Bull, it is a warning to the collective bargaining position of the FOTA teams. It is a clear sign that the early signatories will again get the best deals, just as they have in the past. It's a bit like deciding when to pit for new tyres for the teams: pit too early and you could suffer later but hang on too long and find that you have been done on the undercut.

 

[jez101]

I don't know if it has been quoted elsewhere, the interview was a week ago, but on his personal channel formula1.com Bernie said this in another example of posturing

BE: The teams have to learn to be competitive without tonnes of money. They have to refocus again on the basics - on racing, spending on the sport - and not on baronial motorhomes and all kinds of entertainment.

Q: But what about the ‘rich’ teams, Red Bull, McLaren, Mercedes and Ferrari, what are you telling them: don’t spend the money that you have?
BE: We have had this kind of problem for quite a while now as of course they spend what they have. You could install a mandatory budget for all teams - on the basis of the smaller teams - but they [the big teams] don’t like it and fiercely fight against it.

Q: Could we see such a budget coming in the next few years - whether the big teams are happy with it or not?
BE: I would welcome it. Yes, I think it could happen.

Q: Couldn’t that be implemented in a new Concorde Agreement? What is the state of affairs with that right now?
BE: We are in the middle of discussions.

Q: Where is the weak point?
BE: Money, of course. They [the teams] want to get more money - to be able to spend more!

 

[Andyoak]

I thought Bernie was against a budget cap when Max proposed it originally...

 

[siffert_fan]

Bernie changes his positions more often than a hooker. It all depends on which idea holds the prospect of fattening his bank account more.

 

[Andyoak]

Not many posts on here but I'm long enough in the tooth to have seen plenty of Bernie flips...

 

[jez101]

A good article by Andrew Benson on the politics.

It is quite easy to think that Ferrari and Red Bull are on the same side as they both quit FOTA, but actually Ferrari quit FOTA in a row with Red Bull, who then also left (taking Toro Rosso with them). Sauber also quit at that time and HRT was never a member.

Ferrari agree with the remaining FOTA teams on the RRA it appears. They think the FIA should police it but Red Bull disagree on the way the sums are done.

It seems that there are a number of battles in and around the Concorde negotiations:

1. Bernie vs Ferrari for control over the sport
Ferrari want to be in position to control who replaces Bernie. They believe that there is a good chance that Bernie will not be around at the end of this agreement (2020?), whether that is due to a sale by CVC and co or simply old age.

2. Bernie vs Ferrari vs Red Bull vs McLaren vs Mercedes vs the rest on the revenue split
Everyone wants to maximise their share of the revenues. Bernie needs to keep at least $400m a year to pay off the loans the group has from RBS. Ferrari want to keep / increase the premium they get. Red Bull want some of Ferrari's special treatment. McLaren and Mercedes believe they can get more by negotiating as a block but they all want as much as they can get.

3. Red Bull & Toro Rosso vs the FIA and the other teams (including Ferrari) on the Resource Restriction Agreement
Everyone except Red Bull have written to the FIA asking them to take the independent role policing the teams expenditure under the RRA. Red Bull oppose the FIA's involvement and also argue that the accounting is unfair as they are not a road car manufacturer.

4. Bernie vs everyone else on the RRA's part of the Concorde Agreement
Bernie wants a tight budget cap so he doesn't need to pay as much revenue share. The teams argue that the RRA and the Revenue Share are two different discussions as they seek to increase their own profits by maximising revenues and controlling costs.

5. Red Bull, Toro Rosso and Bernie vs the other teams (including Ferrari) on customer cars
Red Bull want to be able to sell RB7s to Toro Rosso, HRT and Maroussia (for example) to recover some of their prior year costs. The established teams reject this as it risks them having to race against 8 Red Bulls. McLaren and Ferrari take the view that if smaller teams disappear, they should instead run third cars in house which is not allowed.

6. Bernie vs the FIA on the rules
The FIA also need to sign the Concorde Agreement as it defines who controls the rules. With at least one major technical change planned during this next agreement that Bernie is not exactly keen on (the engine formula), the details behind the timing of this and control needs to be locked down.

 

[Brogan]

A nice summation, thanks Jez

Business as usual in the murky, convoluted, back-stabbing world of F1 then.