US-Qatar planning Formula 1 takeover

Something is cooking in Formula 1. CVC Capital Ventures the majority shareholders of F1 may be trying to divest off their shares, if BBC reports are to be believed.

And surprisingly the prospective investors are a consortium comprising RSE Ventures of America and Qatar Sports Investments. RSE Ventures is owned by property tycoon Stephen Ross and owns football team Miami Dolphins. Qatar Sports Investments is a Sovereign fund of Qatar and owns the Paris St- Germain football club.

The deal, which is not finalised yet, could be anywhere between 7 and 8 billion dollars. There are other bidders also who are prospecting acquisition of the Formula 1 shares.

At present there is an F1 Grand Prix held at Austin, Texas and no races are held at Qatar. Infact it is said that when Bahrain signed in to host the first race in middle east, it had a clause that there can be only two races in Middle East. So apart from Bahrain and Abu Dhabi, there cannot be a third race in Qatar.

Qatar, with the FIFA football worldcup in its bag, albeit controversially, is looking at increasing its sports footprint and hence bringing in more tourist revenue, as well as investments.

America is the home of automobile majors, although these automobile companies have declined, the demand for automobiles continues as well as the demand for motorsports.

Nascar is popular in America and despite the sole F1 race at Austin, Formula 1 hasn't caught the imagination of the american public. American ownership of Formula One management may kick start the love for Formula 1 in USA.

It also may be a good opportunity for CVC to exit Formula One as the viewership has been declining. Bernie Ecclestone is also not growing younger any longer and the shrewd businessman that he is, it is not wonder that he may be looking at exiting F1 by enchasing his 5% shares and any other additional bonus that he wants.

The final word on this hasn't been heard yet. 

Corruption in F1 Sale

F1 and Corruption

Corruption has to be dealt with using the strongest possible penalties. Unfortunately, in a corruption case in F1 sale, not many companies have come forward to speak against it.

On 27th June, Gerhard Gribkowsky was convicted by a German Court as it was found that he has taken 44 million USD in bribe from Bernie Ecclestone for the sale of F1 and failing to pay tax on that 44 million USD. Gerhard Gribkowsky was the risk manager in Bayern Landesbank and played a key role in the sale of F1 to Bernie Ecclestone's favourite candidate. At this point of time Bernie Ecclestone faces no charges as the case was limited to tax fraud. Bernie Ecclestone was reported to have submitted to the court that he was blackmailed to pay the money. German Chief Prosecutor Christoph Rodler had told the court that "Ecclestone was not a victim of blackmail, rather a co-perpetrator in bribery." He had further said that "Gribkowsky did not receive a consultant fee, rather bribery payments" from Bernie Ecclestone.

Unfortunately, despite this case going on for sometime, the F1 teams didn't speak out against corruption. Now for the first time after the formal conviction of Gerhard Gribkowsky, Daimler group has come strongly spoken out and have demanded a thorough enquiry.

Since Bernie Ecclestone controls the F1 with a very strong hand, he is not likely to agree to a thorough probe into the events surrounding the sale of F1 by Bayern LB. It is reported in a German paper Handelsblatt that Daimler has said "does not tolerate the immoral or corrupt practices of its employees or its business partners." It may so happen that Daimler who owns the Mercedes team may pull out of F1.

Daimler coming out strongly against corruption will also enhance its reputation, especially in the developing countries where the perception is that companies from developed countries blame third world countries like India and China for corruption but themselves do nothing to stop it. It appears finally a company is walking the talk as far as corruption is concerned.

The last word on this issue is yet to be spoken on F1 and corruption...

Formula 1 Needs Mercedes

In our previous article "Formula 1 Politics Mercedes to Quit?" we had detailed the machinations of the Grand Old man of Formula 1 Bernie Ecclestone. http://www.arjunaubacha.blogspot.in/2012/05/formula-1-politics-mercedes-to-quit.html

Mercedes a much bigger name than Red Bull and McLaren. Keeping it out of the board is something which will definitely not be agreeable to Mercedes. Neither will it be seen in good light by the millions of its followers. The dispute continues to remain unresolved. Earlier Mercedes was quick to state that it is not pulling out. However, the battle is going to be murkier.

Formula 1 Politics: Mercedes to Quit?

Formula 1 and Politics are two sides of a coin and are inseparable. This feeling is being reinforced every other day.

The latest political battlefield in F1 is around the new concorde agreement. 

In March Bernie Ecclestone had announced that he had concluded an agreement with a majority of the Formula One teams over a new Concorde Agreement. The existing concorde agreement is bound to get over by the end of this year. He had announced via a statement "I am pleased to announce that we have reached commercial agreements with the majority of the current Formula One teams, including Ferrari, McLaren and Red Bull racing about the terms one which they will continue competing in Formula One after the current concorde agreement expires at the end of this year."