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Is Formula One for Sale?

After initial denial, owners admit something’s up.

by on May.09, 2011

The face of Formula One, Bernie Ecclestone insists the sport isn't for sale - or is it?

After initially denying any interest in selling the vastly profitable Formula One race series, the sports owners now acknowledge there may be some talks underway – though it’s unclear where any negotiations might lead.

Rumors have been circulating that a consortium led by Rupert Murdoch’s News Corp. and Exor, the Italian investment arm of Fiat’s Agnelli family, have approached F1 owner CVC Capital Partners with an offer to acquire what is generally considered to be the world’s most powerful and profitable motor sports program.

After initially denying anything was up, CVC’s public face, Bernie Ecclestone, has acknowledged what is now being described as a “friendly” offer.

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In a formal statement, Formula One’s current owners announced, “CVC can confirm that it has recently received an approach from the Exor News Corporation consortium.”  The group added that Rupert Murdoch’s son and senior News Corp.  executive “James Murdoch has informed us that the approach is friendly, at a very preliminary stage, and that they acknowledge that Formula 1 is privately owned by CVC and not currently for sale.”

Could team owners, including Ferrari, play a role?

That position was underscored in a report published this morning by the Scotsman out of Edinburgh, Ecclestone is quoted as saying the major shareholders in CVC “do not want to sell.  That is 100 percent for sure.”

But the statement from Formula One’s management left a little wiggle room, suggesting, CVC “recognizes” that there could be a role for the News Corp./Exor consortium as “possible investors” – if it is “in the interest of the sport and its stakeholders.”

CVC has owned the rights to Formula One since 2006 and the management team has ruled the sport with an iron fist, previously fending off a potential revolt by some team members who had threatened to bolt and launch a competing program – as happened some years back between Indy Car and CART.

Could the involvement of Murdoch churn things up once more?  Intriguingly, his consortium is hinting it could try to do an end-run around Ecclestone and his partners.  A News Corp./Exor statement said that, “over the coming weeks and months, (the consortium) will approach potential minority partners and key stakeholders in the sport.”  The term, “stakeholders,” say those familiar with F1, likely means various team owners.

Indeed, reports out of Europe suggest some of the most powerful teams on the Grand Prix circuit – Red Bull, McLaren, Mercedes and Ferrari — plan to meet with News Corp. and Exor representative in Germany.

For the moment, said a Ferrari statement, the Italian maker could not comment because “We are not directly involved.”  But Ferrari cautioned that it “stressed the importance of ensuring the long-term stability and development of Formula One.”

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