menu

Culture

News Corp in talks to make joint bid for one of few sports where it has no foothold with Mexican magnate Carlos Slim.

Piers Fawkes, PSFK
  • 21 april 2011

Powered by Guardian.co.uk
This article titled “Formula One subject of takeover talks by Rupert Murdoch and Carlos Slim” was written by Ben Quinn, Mark Sweney and Dominic Rushe in New York, for The Guardian on Tuesday 19th April 2011 21.15 UTC

Rupert Murdoch’s News Corp is in talks with Carlos Slim, said to be the world’s richest man, about making a joint bid for the control of Formula One motor racing – one of the few major commercial sports in which it has yet to gain a foothold.

The bid was, according to Sky News, in the early stages, with News Corp in talks about forming a consortium that would include the Mexican billionaire.

It would also be the first time that the global media group, which currently owns the rights to most live Premier League football, had taken over an entire sport and could be a major blow for the BBC.

The BBC counts F1 as the last major sport – unprotected by legislation governing its broadcast – over which it has sole broadcasting rights in the UK.

It secured the television rights to show Formula One in the UK from the 2009 season as part of a five-year deal covering all platforms and can broadcast F1 on the BBC Sport website as well as on TV and radio. However, senior managers have questioned whether the £40m a year cost of the contract is worth it at a time the BBC needs to make savings.

A spokesperson for News Corp declined to comment on what she described as “rumour and speculation”.

However, a source with knowledge of the discussions has confirmed to the Guardian that News Corp 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 said.

The Concorde Agreement between F1’s governing body and the teams, which governs the distribution of commercial revenues from the sport expires at the end of next year. “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 source added.

News Corp already has its hands full with a very real attempt to take over the broadcaster BSkyB. The path for its proposed £8bn purchase of the 61% of BSkyB it does not already own was cleared in March when the culture secretary, Jeremy Hunt, approved News Corp’s plan to separate off Sky News.

F1’s current majority stakeholder, the private equity group CVC Capital Partners, was reported to be unaware of News Corp’s interest, according to Sky News, which said there was no contact between them.

Aside from CVC’s holdings, the ownership of F1 is held by a mosaic of different, smaller companies.

JP Morgan, the Wall Street bank which was a former F1 shareholder, was reported to be advising News Corp about the bid and said that taking part in a consortium was one of several options that News Corp is examining in relation to motor racing.

Mark Kleinman, Sky’s business editor, said he had been told that the bid was at “an embryonic stage”.

He added that James Murdoch, News Corp’s deputy chief operating officer, was involved in the company’s discussions with prospective partners. “The company is kicking the tyres, as you would expect, given that there may be a serious business opportunity to examine in relation to F1,” Kleinman quoted a person close to the sport as saying yesterday.

“It has been approached by a number of potential co-investors and is thinking about its options but there is a very real chance that it will come to nothing.”

CVC Capital Partners, which paid more than .5bn to gain control of F1 in 2005, declined to comment.

Any bid involving News Corp would face calls for regulatory scrutiny, because of rights issues involved and the political heat that surrounds the media firm.

A source told the Guardian that when CVC gained control of F1, European regulators “looked extremely hard” at the deal and he believes that given News Corporation’s control of rights and sports there could be regulatory hurdles.

Also, both the FIA, F1’s governing body, and its chief executive, Bernie Ecclestone, are considered, pretty much, to have veto rights on new owners.

“Unless any bidder – be it News Corp, its partners or a rival – is welcomed by Bernie nothing is happening,” said the source.

News Corp is already facing investigations over its takeover of the remaining shares in BSkyB as well as the ongoing probe into its newspapers involvement in the illegal phone hacking scandal.

As well as regulatory scrutiny, a takeover might also face stiff opposition from some in the car industry who have been in favour of it remaining a free-to-air television event because of the large audiences it delivers for each race.

In the meantime, CVC faces issues of its own. The British entrepreneur billionaire Bernie Ecclestone has been questioned by German authorities about an alleged multi-million pound bribery scandal involving the sale to CVC. Ecclestone is not the subject of the investigation and is co-operating with the authorities.

Officials are trying to establish who paid about m (£33m) to Gerhard Gribkowsky, a former banker with state-owned BayernLB who oversaw F1’s sale to CVC in 2006; they are believed to be planning to question CVC executives. Gribkowsky was arrested in January.

F1 would be a small investment for Slim. Last month, the 71-year-old was named the world’s richest man by Forbes magazine – worth bn, most of which is wrapped up in América Móvil, Latin America’s largest mobile phone company.

guardian.co.uk © Guardian News & Media Limited 2010

Published via the Guardian News Feed plugin for WordPress.

Culture
Trending

How Indiegogo Is Becoming An Adult Product Destination

Retail
Home september 23, 2016

Watch This Fire Pit Dance Along To Your Favorite Song

Music City Fire is a system that is designed to flicker in time to ambient music

Automotive september 23, 2016

Slick GPS Navigator Gives Directions To Moped Riders

This small, round device attaches to a sideview mirror to display maps for safer traveling

Trending

Get PSFK's Related Report: Future of Automotive

See All
Home september 23, 2016

A Clock That Beautifully Manages Your Information Overload

The wall-mounted timekeeper is made to help people maintain focus and stay up to date with their appointments

Arts & Culture september 23, 2016

Performance Piece Blends Dancers Into Folds Of Light

The work provides commentary on the increasing connection between programmed and analog dimensions

Related Expert

Chris Riley

Turning information into insight

Design & Architecture september 23, 2016

Design Firm Adapts Childhood Homes For Unemployed Young Adults

The studio has unveiled three prototypes of transformed living spaces for people forced to move back in with their families

Health september 23, 2016

These Chocolate Squares Claim To Reverse The Aging Process

A group of researchers from Cambridge University have developed a candy bar that promises to give you a youthful glow

Cities september 23, 2016

Food-Producing Architecture Competition Seeks To Better Feed Cities

A design challenge in Copenhagen highlights the need and beauty of urban farming

PSFK LABS REPORT

Future Of Automotive
Scenarios Driving The Digital Transformation Of An Industry
NEW

PSFK Op-Ed september 21, 2016

Creative Agency Founder: Using VR As A Race Relationship Tool

Maurice Bernstein, CEO and Founder of Giant Step, explores the value in transforming headsets from high-tech entertainment tools into empathy machines

PSFK Labs september 22, 2016

The Future Of Work: Why Innovation Is Every Employee’s Job

PSFK Labs sits down with management at Johnson & Johnson to learn how the company comes up with their next ‘big idea’

Health september 23, 2016

Wearable Monitors Sun Exposure To Prevent Sunburn

The clip monitors UV rays to make sure you're not receiving too much sunlight

Op-Ed september 23, 2016

Productivity Expert: The Magic Of The Five-Hour Workday

Stephan Aarstol, Founder of Tower Paddle Boards, explains why the modern notion of office hours needs to evolve

Culture september 23, 2016

This Exhibition’s Crowning Jewel Is An 18k Gold-Plated Toilet

The piece, titled 'America,' is meant to raise questions about the country's wealth inequality

Culture september 23, 2016

Match Up With Dates On Tinder Based On Your Music Preferences

A new partnership with Spotify lets people pair up based on shared tastes in artists

Entertainment september 23, 2016

Capture, Cut Up, And Configure Your World In 360 Degrees

To meet a booming 360 and VR video-capturing industry, a multimedia software company bolstered its media editing suite for 360-video creation

PSFK LABS REPORT

Future Of Work
Cultivating The Next Generation Of Leaders
NEW

Advertising september 23, 2016

These Trucks Drove Around In Circles For 24 Hours To Keep Time

The giant ticking clock was created by 14 Scania vehicles in a deserted airfield

Advertising september 23, 2016

Buy Movie Tickets Directly From Your Facebook Profile

The new feature is part of a campaign from Fandango to further imbed social media into the ticket vendor's digital presence

Asia september 23, 2016

Co-Working Space Brings The Calming Atmosphere Of Nature Indoors

An architectural firm in China has designed a new type of shared office that prioritizes the natural environment

No search results found.