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CVC F1 shuffle not quite what it seems

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CVC F1 shuffle not quite what it seems
Sep 5, 2011, 5:08 PM

There is a story at large today that Donald Mackenzie, the guiding light behind CVC Investment Partners, has become chairman of Delta Topco, the co...

There is a story at large today that Donald Mackenzie, the guiding light behind CVC Investment Partners, has become chairman of Delta Topco, the company which owns the commercial rights to Formula 1. This in effect makes him the Chairman of F1.

The detail behind it is that nothing has actually changed, as Mackenzie was already the acting chairman, which was looking to place a top business name in the role.

Sir Stuart Rose, formerly chairman and chief executive of Marks and Spencer, was tapped up about taking the job, but is believed to have declined unless the role meant some hands-on control over the business, rather than merely a chairman of the board.

The Mackenzie 'story' is intended to show that the group is in control of the F1 situation a week before an important meeting of CVC investors, at which the subject of the private equity group's investment in F1 is likely to be a subject of keen debate, in light of the ongoing Gribkowsky bribery case in Germany.

Some CVC shareholders have been quoted recently in the Financial Times saying that they wanted some answers about the circumstances in which CVC paid $1.7 bilion for a controlling stake in F1 from Gribkowsky's former employer, Bayern LB.

Gribkowsky is in custody in Germany, where prosecutors allege that he received bribes over the sale of the F1 stake. Ecclestone has admitted paying $44m to Gribkowsky, but had said that it was not a bribe. Ecclestone, who received $41.4 million in commission on the deal, has been investigated but not charged with any wrongdoing.

“Every large investor (in CVC) has this on the radar screen and will want to get answers to two questions: did you know anything about what was going on and, if not, what changes have you made at the company level after you have found out?” one investor told the FT.

Bayern LB's CFO Stephan Winkelmeier said last week that the bank had carried out internal investigations and found that the sale to CVC was carried out correctly and that the price was "in line with expectations."

It's not only CVC's investors who want this matter to be dealt with so they can move on. F1's three main stakeholders - the teams, FIA and FOM - need the matter resolved before the process of putting together an agreement binding them all together post-2012 can begin in earnest.

That is the date on which the current Concorde Agreement ends.

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