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Who Owns Formula One?

One of the latest news items is that CVC has sold MotoGP (for a mere $626 million) so that it can own Formula One. This has been announced without fuss on several networks but it raises all sorts of questions in my mind.

For a start, I didn’t even know that it was possible for F1 to be owned (or MotoGP for that matter). But apparently everyone else has known this for ages – at least, no-one seems surprised by the news.

And what exactly is being owned? F1 Racing-Live says that “CVC’s control of formula one is now official” but what the heck does that mean? It cannot be that they are in charge of the rules and regulations – the FIA does that. And the circuits are owned by various concerns around the world, as are the teams. Bernie Ecclestone sells the television rights to a media company every year so maybe this is what they’re talking about.

Bernie

Bernie Ecclestone

I googled CVC to find out more about the company. There are a few possibles but the leading contender would appear to be an American Cablevision System; which would fit with the theory that it’s the television rights that are being owned. But it’s only a theory – I’m guessing here.

And how much sense does it make that the owner of the television rights can sell them to anyone they choose, as appears to have happened with MotoGP? Wouldn’t that make a mockery of Bernie’s careful choice in the first place? Or am I being too trusting and all the FIA really care about is how much they can sell the rights for?

I find the whole business rather unsettling. To discover that one’s favorite sport is actually owned and “controlled” by a multi-million dollar and faceless corporation is a bit of a shock. In fact, it has uncomfortable undertones of F1 not being a sport at all but rather some sort of marketing exercise designed to lull the masses to sleep while their pockets are picked. And the masses means you and me, buddy. Oh, brave new world.

As the saying goes, I only ask because I want to know. If anyone out there does actually understand what this is all about, I’d be very grateful if they’d clue me in.

Separator

Update on Microsoft to Enter Formula One?:

It’s true. If Scoble says it is, it must be.

9 Responses to “Who Owns Formula One?”

  1. It seems that CVC didn’t own MotoGP, they owned part of MotoGP with Dorna (they’re the Spanish company I was talking about). They had to sell their share to be allowed to own F1.

  2. Yeah, that’s how I understood it. I just wish I knew how they can “own” F1…

  3. CVC is nothing to do with a Canadian Cable company. It’s CVC Capital Partners, a venture capital company. They partly own the AA, amongst other things.

  4. Thanks for that, Mark – it makes things a little clearer. So it isn’t the TV rights that are being owned here – but what is? And what benefit does CVC get by owning F1, whatever that means? I think it must be a deep mystery understood only by the financial wizards of this world… ;)

  5. I “sort of” understand it – but I’m not a financial wizard! It is TV rights though. The commerical rights of Formula One, i.e. sale of TV rights, income from track-side advertising, track owner (promoter) payments etc. are all paid to “Formula One Group” companies. Therefore CVC get the lion’s share of a massive income for a start.

    The “F1 brand” owned by Formula One Administration (an “F1 Group” company) is also a goldmine waiting to be exploited. They have recently started selling F1 branded products, very high quality/high price. The “F1 brand” is the name itself and also the logo you see at the start of Grand Prix, on those boards behind drivers during interviews etc. (you can see it at top left of http://www.formula1.com/)

    Happy to help. Let me know if you’ve any more questions, and I guess you might have, its confusing as…..

  6. I did some more digging after my response to your previous comment, Mark, and what you say confirms what I found. It seems there is a complex web of ownership behind F1. One site had a diagram to illustrate all the interests involved – it was about twelve layers deep! But CVC sits atop the lot. The potential income from it must be huge.

    But, from all that, it would seem that Bernie Ecclestone is merely acting as an agent for CVC when he sells the TV rights. I wonder how that sits with him…

    Thanks for the offer, Mark – I may well take you up on it. As my first post states, I never claimed to be an expert and this blog is only my opinion. ;)

  7. That site I believe is Wikipedia and therein lies a problem! You might notice the name of the author of the diagram is Mark83, otherwise known as me! So be careful when trying to verify my posts there! However I’ve done a lot of digging and I’m pretty confident – if you click on the image you can see I’ve used very reputable sources (e.g. The Economist & the European Commission).

    As for Ecclestone, don’t underestimate him. He’s made billions from selling his share and yet has still managed to stay in day to day control, oh an maintain a 25% share of F1′s massive income as well as a huge (undisclosed salary). He’s regularly described as the most intelligent man in the world and the world’s best deal maker. Suprising I know!

  8. Sounds to me as if I’m finding my info in the right place, Mark (the Wikipedia is a wonderful thing!).

    But I would never underestimate Mr Ecclestone – who would argue with all that money? I just wish he’d never sold the Brabham team…

  9. [...] Further to my recent post on Who Owns Formula One? and the clarifying comments by Mark Higgins, it now appears that CVC may be regretting their purchase. The ongoing dispute between the FIA and the GPMA (the F1 manufacturers association) over implementation of the engine freeze is making the future of F1 unsure and this impacts upon CVC’s ability to predict revenues from the sport. According to Update-F1, CVC has told the manufacturers to end the dispute. [...]

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