Mr Supremo tells it how it is

[GeoffP]

For some reason I have found the attached article from the Guardian.

Bernie Ecclestone, the formula one commercial-rights holder, has warned the competing teams that not only are they unlikely to gain a bigger slice of the sport's revenues over the coming years but that they might have to do with less income.

The teams believe it is wrong that 50% of Formula One's income goes to Ecclestone and CVC Capital Partners, which has a stake in his Formula One Management empire, without any of that cash benefitting the sport. For his part, Ecclestone believes the teams complain too much and have forgotten that his efforts over 30 years have made them as rich as they are.

So that makes sense then, because it is generally believed to cost too much for new/private teams to get into F1, existing teams are pulling out because the excessive costs are not financially viable in today's market - Bernie and CVC should keep more of the commercial revenues as the teams have got rich enough from F1 already!

I knew I was missing the point somewhere along the line. Thank heavens we've got the likes of Bernie to explain the situation to us and control the greed of all those teams flocking to F1 and over filling the grid!

http://www.guardian.co.uk/sport/2009/ja ... ney-kubica

 

[Brogan]

I noticed this article is dated 21 January so I expect Bernie didn't have it all his own way after the FOTA almost-split.

We all know Bernie isn't stupid so I can only assume it is supreme arrogance which makes him act the way and say the things he does.

Last time I checked, teams were spending several hundred million pounds a year so after Ferrari's disproportionate slice of the £500 million, that doesn't even come clost to covering the other 9 teams' costs.

 

[cider_and_toast]

Now I am no expert in buisness law and just trying to get my head around the tangle of companies that make up F1 is giving me a headache but it would seem that the match that started the fire was the mid 90s decision to transfer the ownership of the commercial rights of F1 from the FIA to FOPA (the Ecclestone owned Formula One Promotions and Administration). I'm not sure how this happened and the Wiki link below muddies the waters instead of helping to clear them.

http://en.wikipedia.org/wiki/Formula_On ... nistration

In a nutshell the right to negotiate and manage the commercial rights to F1 were at the heart of the FISA/FOCA war of the early 80s. At its resolution all the teams involved in F1 and FISA (Now the FIA) signed the first Concorde agreement. Part of this deal was to grant the right to manage the commercial rights of F1 to FOCA while FOCA accepted that the ownership of remained with FISA.

After Ecclestone left Brabham he was no longer a constructor and therefore could no longer be a member of FOCA. Now as I understand it, it was at this point he formed FOPA to take on the management of the commercial rights on behalf of the teams and remove the responsibility from FOCA. Then in the mid 90s the FIA decided to grant the ownership of the commercial rights of F1 to FOPA providing FOPA pay a fee to each team. This was for an initial period of 14 years. A quick card shuffle at Bernie towers and the next thing you know the name FOPA is gone and in comes SLEC holdings which is the holding company for the various F1 operations that Ecclestone manages.

The thing is, the commercial rights to F1 were never owned by the teams but only managed by them. From the moment they granted FOPA through Bernie the right to manage their affairs the teams were effectively giving up their oversight of what was going on. This was ok while Bernie was still the poacher but when he turned gamekeeper the teams now had no oversight and no say in their own commercial affairs.

 

[FB]

I may be wrong but I'm sure I recall reading that Bernie (or his company) had been given the commercial rights to F1 for 100 years? Weren't the EU involved somewhere as well as the FIA were found to have a "conflict of interest" if they were both setting the rules and carrying out the commercial negotiations?

'cos Berni is such a hands off guy when it comes to the rules and regs of Grand Prix racing...

This is an interesting article which will probably only help to muddy the waters even further.

http://www.grandprix.com/ns/ns20360.html

 

[GeoffP]

Bernie bought the right to the name "F1" for 100 years for $350M, this means he is seriously focused on preventing a breakaway series - well, as much as a 79 year old multi-billionaire can be interested in the remaining 90 years of his ownership.....

Do you think he might have made a deal with someone else?

 

[Speshal]

is SLEC holdings named after Slavika Eccleston?

in the interest of muddying the waters even more:

Formula One motor racing is controlled by a number of companies within the Formula One Group. The principal companies are Formula One Administration Limited and Formula One Management Limited. Another company called Formula One Holdings Limited ("FOH") is the parent or great-grandparent of both.

FOH is in turn owned by SLEC Holdings Limited ("SLEC"). SLEC is owned 75 per cent by Speed Investments Limited ("Speed"), and 25 per cent by Bambino Holdings Limited ("Bambino"). Speed is in turn owned in varying proportions by three banks.

http://www.hmcourts-service.gov.uk/judg ... gs_ltd.htm

 

[cider_and_toast]

Ok, My head hurts but I'm going to try and lay it out from what I've been able to read from various sources.

Originally all the F1 related operations under Bernies control were placed under the SLEC Holdings banner which was indeed named after and did at one time belong to Slavia Ecclestone.

After the failed attempt to float SLEC, and by association F1, on the stock exchange, various investment groups purchased a stake in SLEC. The company was re-arranged under the banner of Speed investments which owned 75 percent (as SLEC Holdings) and Bambino Holdings which owned 25 percent.

Fast forward through various finacial crisis with the various owners of the 75 percent and we arrive at the point where the German TV group Kirch which held the Speed Investments shares, was bought out by CVC investments, JP Morgan and Leimans. It was at this point that Ecclestone re-arranged his holdings so that he retained control of SLEC and the other formula one related companies. This was when CVC sued Ecclestone through the European courts for greater control.

Finally, CVC bought all the remaining shares from JP Morgan, Leimans and Ecclestone and so now hold 100 percent of the SLEC, Formula one management and all other associated groups. Ecclestone used the funds from the sale of his shares to purchase a steak in Alpha Prema (the banner company name that CVC use for SLEC etc) and these are held under the Bambino holdings name. The actual size of this stake is not known.

Phew

So there you go. Aside from a small holding (no pun intended) CVC own everything.

I hope that clears it up.

 

[Brogan]

That's made it worse.

I have absolutely no idea who owns what, how much or why

 

[Speshal]

Bambino holdings is the Ecclestone family trust fund