Murdoch's F1 takeover bid 'still alive' UPDATE #7 (GMM) Rupert Murdoch's interest in bidding to buy formula one might not be dead, according to the financial news agency Bloomberg.
Amid the News of the World and phone hacking scandal in the UK, News Corp's interest in F1 together with the Ferrari-linked Exor company was believed to have receded.
But Bloomberg cites a "person familiar with the situation" as reporting that the bid to buy the sport's commercial rights from CVC was "very much alive" just weeks ago.
And the source said Murdoch's son James, and Exor's John Elkann, are still "actively courting" the F1 team bosses "and working on a 5 to 10-year business plan" for the sport.
News Corp and Exor refused to comment, as did CVC.
But their apparent renewed interest in F1 could be linked to the beleaguered chief executive Bernie Ecclestone, who on Wednesday will appear in Munich as a witness in Gerhard Gribkowsky's corruption trial.
He said whether CVC wants to sell or not is none of his business.
"He (CVC's Donald Mackenzie) is the guy who will turn the lights on and off," said Ecclestone. "I have very few shares, so it's nothing to do with me."
His best card to play could be his impressive record at the sport's helm.
"I could just walk out," he warned.
As well as the Gribkowsky affair and a possible UK investigation, the rumblings about F1's future also coincide with the expiring and all-important Concorde Agreement, with the teams pressing hard for more income.
"Let's be clear: we're poorly paid," said Force India's Vijay Mallya.
Ecclestone, however, ridicules the teams' alliance FOTA, saying: "I don't know where they meet -- probably Starbucks or somewhere. These are nice coffee chats."
Max Mosley, who controlled F1 hand-in-hand with Ecclestone for decades, tips his old friend to win the day on all counts.
"If he went into a revolving door behind you," the former FIA president said, "he would come out in front."09/20/11 News Corp, Rupert Murdoch’s US-based media empire, announced in May that it was looking at forming a consortium “with a view to formulating a long-term plan for the development of Formula One.”
Confirmed partners included Italian investment firm Exor, run by the Agnelli family which controls Ferrari through carmaker Fiat.
However, Ecclestone claims News Corp has shown no interest in a buy-out since then, despite News Corp-controlled BSkyB snapping up the joint television rights to F1 in the UK from next season. “News Corp has not made a return visit,” Ecclestone told LondonlovesBusiness.
However, F1’s 80-year-old chief executive admitted that the sport’s owner, private equity firm CVC Capital Partners, would entertain offers for its investment.
“I have no doubt in my mind that if somebody came along with a respectable, sensible offer they would probably say let’s have a chat,” he said. “I think one or two people have come along with an offer they probably thought was sensible but CVC didn’t.” However, Ecclestone said it was extremely unlikely that he would be buying back a sport in which he is now a minority shareholder. 05/04/11 Murdochs never stop. Just as Jeremy Hunt is revving up to approve News Corp's purchase of BSkyB, with the not at all onerous caveat of spinning off Sky News, the empire has moved on. News has already picked up Shine, Elisabeth Murdoch's TV production company - and there is hardly any reason to stop there amid vague speculation that more production buy-ups (a merger with Endemol perhaps?) could yet be contemplated. That would be a nice rebuke to the BBC line that News/Sky doesn't make enough original television.
Never mind that, though, now it's time to go for the keys to Formula 1 - one of the very few sports that has stubbornly stuck to free to air television. Perhaps James Murdoch was unexpectedly seduced after his visit to Abu Dhabi earlier this year, where the hotel is next to the race track and, of course, the vast Ferrari World. What's not to like about fast cars after all; surely they are far more fun that the muddy northern business of rugby league, which you can already find on Sky.
With growing Murdoch interests in Europe as well as Asia - controlling F1 television rights could be useful in pushing forward Sky companies in Italy and Germany, and key Asian countries. The sport is hoping to break through into India (which holds its first GP this year), where News Corp is building its business fast. There's no secret to the strategy of course - buy up sports rights, then audiences and declare victory from there - it's just nobody else has the vision and the capital to do it.
Never mind also Bernie Ecclestone, the sport's octagenerian mastermind. He has no heir. Plus, the all important master TV rights are controlled by venture capitalists at CVC, who at some point only want money. There is plenty of talk, too, that F1 has to be on free to air TV, but apparently that is not part of the hard-to-change master F1 Concorde agreement, which in any event is due for renewal in 2012. And the notion that F1 sponsors will only pay big money if they reach big audiences has long been disproven by the amount sponsors are willing to pay to be associated with Premier League teams.
The harder issue, then, is the Byzantine politics of F1. The curiosity of the Murdoch move was the decision to bring in Fiat heir John Elkann into the mix (though in the way of billionaires, James Murdoch and Elkann are apparently friends). Fiat owns Ferrari, and the rival teams won't want one of their number to have a say in the control of the sport. But Fiat/Ferrari gives the News Corp approach credibility in the industry, and, more importantly contacts - but whether one team can own the sport to the exclusion of others seems unlikely.
News Corp tends to bid up when it wants to buy an asset (cf Dow Jones), and unlike anybody else, its international broadcasting reach means that it could easily see greater benefits from owning F1 than anybody else. It's early days of course, but this is a bid that could easily come together given the status of the existing owners. James Murdoch's move shows that he is already thinking past the parochial one country Sky deal - that's already concluded in his mind. What else will he end up buying; how big can News Corp become? The Guardian
05/03/11 A bid to takeover the running of Formula One could be on the horizon after European investment firm EXOR, controlled by the owners of Ferrari, announced they were in early discussions with News Corp about possibly making a future bid.
|Carlos Slim Sr.|
EXOR, controlled by the Agnelli family who run car giant Fiat which in turn owns Ferrari, have confirmed they are exploring the prospect of putting together a takeover bid with News Corporation.
Any attempt at a bid is still a long way off, but EXOR have confirmed the initial interest of the two parties to at least discuss the possibility of making what would be an audacious bid to take over F1.
Carlos Slim, the Mexican billionaire who is currently recognized as the richest man in the world with a net worth of around £45billion, was also thought to be involved in talks with News Corp, but he was not discussed in the statement.
"EXOR, one of Europe's largest listed investment companies, and News Corporation, the global media group, confirm they are in the early stages of exploring the possibility of creating a consortium with a view to formulating a long-term plan for the development of Formula One in the interests of the participants and the fans," read the statement.
"Over the coming weeks and months, EXOR and News Corporation will approach potential minority partners and key stakeholders in the sport."
Significantly, the statement added: "There can be no certainty that this will lead to an approach to Formula One's current owners."
F1's commercial rights are currently held by venture capital firm CVC who bought them in 2006 for £1.8billion.
Chief executive Bernie Ecclestone stated last month that rumors of a takeover by News Corp were "rubbish," and any offer would have to be "ridiculous."
However, given the combined worth of EXOR, who have a net asset value of £8billion, and News Corp, such a bid should not be a problem.
CVC have, however, also confirmed that a "friendly" approach had been made by the Exor News Corporation consortium, and noted the power the two parties would have if they combined to make a bid.
"James Murdoch has informed us that the approach is friendly, at a very preliminary stage, and that they acknowledge that Formula One is privately owned by CVC and not currently for sale," the statement said.
"CVC recognizes the quality of Exor and News Corporation as potential investors, but any investment in Formula One will require CVC's agreement and will need to demonstrate that it is in the interest of the sport and its stakeholders, taken as a whole." Sky Sports
05/02/11 Bernie Ecclestone, head of the Formula One Group, has said that Rupert Murdoch’s News Corporation would be ‘blocked’ if it attempted to buy out Formula 1. According to the current F1 supremo, a deal is in place with the European Commission (EC) to ensure that the sport remains on free-to-air television.
|Bernie Ecclestone (R) has plans to kill off a Rupert Murdoch bid if it were to happen|
With talk of an entrance from Sky owner Murdoch having been raised a fortnight ago, attention soon switched to the subject of Formula 1 becoming exclusively a pay-per-view package as a result; Ecclestone, though, is adamant that this is not possible.
“I'm sure the European Commission wouldn't let it go through because our agreement with them was to keep F1 on free-to-air television,” Ecclestone told The Independent.
It is believed the deal in question dates back to 1999, with the EC having investigated F1 following claims that Ecclestone and governing body the FIA – then headed by Max Mosley – possessed too much control over the series. 04/28/11 Rupert Murdoch has a "close to zero" chance of buying Formula One and talk of a takeover is being driven by the media and advisers seeking to make money, the sport's supremo Bernie Ecclestone said on Thursday.
A person familiar with the situation told Reuters this month that Murdoch's News Corp was in the early stages of talks to form a consortium to acquire control of Formula One motor racing.
Formula One is owned by private equity firm CVC and managed by Ecclestone. News Corp held preliminary talks with at least one big car manufacturer, thought to be Ferrari, and with Mexican billionaire Carlos Slim, who already has links to the sport, the person said.
"It's media driven," Ecclestone told Reuters in a telephone interview. "It looks very much like someone who is trying to see if they can make (money).
"All of these people that get involved with these things, they get some victims and say 'We can make this happen, I'm sure we can do this' and then all they do is keep pumping fees in." 04/20/11 So, does this mean that Mr. Murdoch is anxiously waiting by the phone and holding meetings preparing for every eventuality? Unlikely.
In fact, Murdoch-senior seems to have been passing the time plotting his next deal.
From News Corp's acquisitions of MySpace and the Wall Street Journal to BSkyB's shock purchase of a 17.9pc space in ITV, Mr. Murdoch has a talent for – and clearly enjoys - delivering M&A surprises.
The latest is that he has held talks with Carlos Slim, the world's richest man, to launch a consortium bid for Formula 1.
So unlikely a scenario it seemed to F1 supremo Bernie Ecclestone, that he denied Mr. Murdoch's interest.
He also declared that his private equity owners CVC Capital Partners have no interest in selling.
CVC has repeatedly denied plans to sell, but it is a private equity business and will ultimately sell. "Surely they will sell couple of years earlier if offered the right price?" said one industry observer.
However, as Mr. Ecclestone said, CVC is unlikely to sell to a media company, as this would restrict the ability to negotiate with other broadcasters.
There would also be legal implications - any takeover would be subject to renegotiating the Concorde Agreement - a contract between the Fédération Internationale de l'Automobile (FIA), the Formula 1 teams and Formula 1 Administration.
The Concorde Agreement states that F1 must be shown free-to-air, as long as there are broadcasters in the region who can do this. This is clearly possible in the UK, where F1 is broadcast by the BBC - in a £40m deal which runs until 2013 - and many other channels around the world. This would mean Sky could not, for now, air the sport exclusively.
However, the question being asked by most is, what do Mr. Murdoch and Mr. Slim think they can do better than F1 veteran Mr. Ecclestone, who turned 80 last October?
Also aged 80, Mr. Murdoch, the younger of the two by five months, believes he has the ability to transform F1 and attract a younger fan base to the sport, according to sources familiar with the situation.
The sources said News Corp thinks F1 needs to work a lot harder at attracting younger people to the sport, particularly in its established markets like Europe - citing digital marketing, better use of social networks and improved exploitation of the brand.
News Corp thinks it is "well-placed" to "transform F1" and attract a completely new audience not currently being marketed to.
"F1 is a global brand. A whole new approach is needed to turn it round and make it more appealing to young people. It currently has an aging fan base," said the source. "It is exactly this that has attracted News Corp."
This is not the first time that News Corp, the owner of The Times, Wall Street Journal and Fox TV, has considered acquisitions with the goal of tapping into a younger market.
When News Corp bought MySpace in 2005, Mr. Murdoch, a self proclaimed "digital immigrant," had no doubt that radical change in the way people consume media was inevitable.
Despite this insight, MySpace, acquired for $580m failed to deliver for its owner, as Facebook and YouTube took the social media lead, and News Corp is now pondering an exit.
What Mr. Murdoch understands better than many is building global brands and developing them in emerging markets.
Under Mr. Ecclestone, Asia and the emerging markets are the big growth areas for Formula One. He has successfully moved races outside the series' European heartland since 2004 to help increase sales. With Brazil, China and India on this year's schedule, Russia is slated to become the final so-called BRIC race host in 2014.
Sources suggested that Mr. Murdoch would seek to widen the sport's appeal by cross promoting and selling the sport with its other assets. He could even look to scrap the elite nature of a visit to the Grand Prix in his pursuit of a younger, digital-minded audience.
A weekend VIP pass for the inaugural Indian Grand Prix costs $4,200, 1.4pc more than for a race in Monza, near Italy's fashion capital, in prices listed by London-based F1 Corporate.
However, Mr. Murdoch's potential business partner Mr. Slim, who already sponsors the Sauber team, may not appreciate such changes.
The Mexican billionaire and celebrities including Jennifer Lopez were among celebrities spotted last year in F1's Paddock Club, which says its tickets are "the season's must-have accessory."
The package includes unlimited champagne, a gourmet lunch, a car parking space and a walkabout in the pit-lane with complimentary ear plugs. The London Telegraph 04/20/11 (GMM) Bernie Ecclestone has played down widespread reports that media magnate Rupert Murdoch as well as Carlos Slim, the Sauber backer and richest man in the world, could be preparing a bid to take over formula one.
The initial report was carried exclusively by Sky News, part of Murdoch's News Corporation empire, but F1 chief executive Bernie Ecclestone told the Telegraph it is "rubbish". [Which means it could be true.]
Sky said the talks, also including a car manufacturer involved in F1, are "in the early stages" and might in fact involve News Corporation bidding for television broadcast rights.
The latter detail could be significant for F1 fans, given Murdoch's notorious attitude about the pricing of media content.
"The company is kicking the tires, as you would expect, given that there may be a serious business opportunity to examine in relation to F1," said a source.
Another added: "It is at a very, very early point and could lead to nothing or could lead to many different permutations."
And yet another source told the Guardian: "They (News Corp) are thinking about F1 and options they could take but that is all it is at this stage."
F1's current owner CVC declined to comment, as did a spokesman for Mexican Slim's group of companies, while a spokesman for News Corporation said: "(We do) not comment on speculation."
Ecclestone said: "The sport is not for sale."
He told the UK Express newspaper: "I suppose anything you or I own is available to buy. But the offer would not have to be right -- it would have to be ridiculous."
A source said: "Unless any bidder - be it News Corp, its partners or a rival - is welcomed by Bernie, nothing is happening."