MOTORSPORT: News Corp linked to new F1 buyout

Rupert Murdoch's media empire again is being mentioned as a potential buyer of Formula One – this time in association with the world's wealthiest man

'There may be a serious business opportunity to examine'
Australian media magnate Rupert Murdoch's News Corporation is reported to be considering a takeover of Formula One in a consortium with the world's richest man, Mexican Carlos Slim.

There is talk of a car manufacturer, perhaps Ferrari, being involved. The speculation comes as F1's long-time supremo Bernie Ecclestone and Ferrari appear on a collision course with motorsport's world governing body, the Federation Internationale de l'Automobile (FIA) over engine rules from 2013. Ecclestone and Ferrari strongly oppose the FIA's move for small, "greener" turbocharged engines.

Planning for any News Corp-led bid is said to be still at "an embryonic stage", but Murdoch's son, James Murdoch, who is News' deputy chief operating officer, is reported to have been involved in talks with prospective partners. The Murdoch empire, one of the world's largest media groups, has been reported previously to have been interested in F1 -- as we recorded here in 2006 -- but it has come to nothing. The latest reports surfaced on Murdoch's Sky News subscriber TV channel in Britain and The Guardian newspaper there.

Sky's business editor Mark Kleinman quoted a person supposedly close to F1 saying: "The company (News Corp) is kicking the tyres, as you would expect, given that there may be a serious business opportunity to examine in relation to F1.

"It has been approached by a number of potential co-investors and is thinking about its options."

However, Kleinman added: "There is a very real chance that it will come to nothing."

And Ecclestone has told The Telegraph newspaper: "It's rubbish -- the sport is not for sale."

F1 has been majority-owned for almost six years by CVC Capital Partners, with Ecclestone -- who, like Murdoch (pictured), is 80 -- still running the sport on behalf of that private equity firm, which these latest reports indicate was not aware of any looming bid.

Ecclestone said recently that CVC was "not looking for any exit over the next two or three years."

Middle Eastern sovereign wealth funds have occasionally been mentioned in recent years as potential buyers of F1. Mexican Slim, 71, is reputed to be worth about US$80 billion and has been ranked the world's wealthiest man by Forbes magazine. The core of the Slim empire is South America's biggest mobile phone company, America Movil, while his Mexican business Telmex is now a major sponsor of Swiss F1 team Sauber -- a deal which secured rookie Mexican driver Sergio Perez's place in that team this season.

Any move on F1 involving News Corp would face close regulatory scrutiny in Europe, especially in Britain -- where Sky News parent BskyB is 39 per cent-owned by News, which is in the process of advancing to full ownership. The Murdoch empire already holds the TV rights to a multitude of other sports.

Ecclestone, the F1 teams, participating -- and prospective -- car manufacturers and the FIA will be concerned at any attempt to secure F1 for pay TV. F1's free-to-air telecasts have been one of its great business strengths for three decades. Ecclestone and perhaps the FIA -- now headed by Frenchman Jean Todt, who was the Ferrari team chief during Michael Schumacher's era with the Italian stable -- are thought to have veto powers over any new owners of F1.

The Guardian quoted a source saying: "Unless any bidder -- be it News Corp, its partners or a rival -- is welcomed by Bernie nothing is happening."

The FIA, under former president Max Mosley, granted Ecclestone the commercial rights to F1 for a century -- a deal Todt is now trying quietly to renegotiate.

News Corp is reported to have New York-based investment bank JP Morgan advising it on any potential F1 deal.

News has said it won't comment on what is only "rumour and speculation".

However, The Guardian source -- claimed to have "knowledge of the discussions" -- said the media group was "considering options regarding F1".

"News Corp going into this transaction now is premature. They are thinking about F1 and options they could take, but that is all it is at this stage," the source told the paper.

Its interest coincides with negotiations between Ecclestone and the teams over a new Concorde Agreement -- the arrangement that controls the commercial relationship between those parties -- to take effect from 2013, which also coincidentally is the year of the new engine regulations.

"They [News Corp] will do nothing until after the next Concorde meeting -- there is no way to possibly value or plan until after that," The Guardian source said.

CVC Capital Partners paid more than US$2.5 billion to gain control of F1 in 2005. A German banker instrumental in orchestrating the sale to CVC has been in Munich's notorious Stadelheim Prison since January this year. Investigators are trying to establish who paid about US$50 million to Gerhard Gribkowsky, who initially represented Bavarian state-owned BayernLB -- one of three banks that owned the shares sold to CVC. Gribkowsky is accused of arranging the sale without a full and proper valuation of the shares. Ecclestone has denied paying the US$50 million to Gribkowsky and has said he has happily co-operated with German investigators.


* The latest London reports of News Corp's supposed interest in F1 in The Guardian and The Telegraph are here
and here.

Picture courtesy of Monika Flueckiger, via Wikimedia Commons

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