Uncertain times for F1 as Ecclestone’s sale talk gets tongues wagging

Bernie Ecclestone 2012 Bahrain

So, Formula One is likely to be sold within the year, according to the latest pronouncement from Bernie Ecclestone.

But Ecclestone is ever the master of smoke and mirrors and it is hard to take anything he says without a shovelful of salt. But more pertinently outside the F1 bubble, it is difficult not to imagine that for many British fans buyouts at the top are not of great interest, especially given the recently revealed financial difficulties Silverstone faces in continuing to host a grand prix. But the two issues might yet still be linked, at least if one has an optimistic take on the future.

Ecclestone, at a conference on Tuesday, said: “There has been a lot of interest and I would say there are three parties at the moment, where I would be surprised if one of them did not buy them [the shares] shortly.” He added that he expected it to happen in 2015.

The private-equity firm CVC, which owns F1, has held its shares longer than it would usually and made its return – an estimated £5bn profit so far from the sport’s £1.5bn annual turnover – so it is perfectly feasible it could sell and a potential deal was on the cards this year with a consortium led by Stephen Ross, the owner of the Miami Dolphins, alongside Qatar Sports Investments.

But as yet it has come to nothing. “Bernie is always very good for headlines, and headlines and controversy are part of F1,” said Mercedes’ head of motorsport, Toto Wolff, in reaction to the news. Possibly with one eyebrow arched.

Indeed, as recently as July the co-chairman of CVC, Donald Mackenzie, who is understood to have come to enjoy F1 and his role in it, was explicit in his denial that the company wanted to offload. “We like owning it, we don’t want to sell it,” he said. Ecclestone also said in July: “Donald Mackenzie doesn’t want to sell, simple as that. He loves Formula One, loves the business.”

It has been mooted that he loves it so much he would buy into F1 himself, perhaps in partnership with Ecclestone. But until a sale is more than just another quote from Bernie, that is all the substance it possesses. Of more gravitas to fans were the words that Wolff went on to say in relation to a potential new owner. “For us, we are participating as a team, it’s important that we have a sustainable shareholder with a long-term perspective and vision,” he added.

Last week Ecclestone revealed that Silverstone’s payment for the 2015 British Grand Prix had been deferred and would be paid in instalments because of financial difficulties the track is experiencing, despite an absolute bumper weekend sell-out at the race and ticket sales for 2016 that are up 53% from this point last year.

The managing director, Patrick Allen, admitted that the circuit needs a £15m investment to secure the future of the British Grand Prix. The track, owned by the BRDC, has suffered from a loss of rental revenue after selling land around the circuit and by an escalator clause in the hosting contract that sees the fee, estimated to be around £15m, rise by 5% a year.

Ecclestone suggested public money should be used to back the circuit. “They are looking for a little bit of support from government sources,” he said. “It’s something they should get because Silverstone does a lot for England and quite a bit for the area. They should get support, as lots of countries do.” A call which Allen backed but that is unlikely to be answered.

In the current economic climate, state funding for a sport that generates huge revenues and markets its glamorous nature appears impossible to justify. Nor would it win any friends. A taxpayer subsidy to a company that is paying fees to a private-equity company with a £1.5bn turnover (which already receives broadcasting fees from the state-owned BBC) would not go down well with any of the electorate, nor would backing a sport already pilloried (largely unfairly) by the green lobby, or one that actually takes place in the UK only once a year.

It would be right were the economy healthy enough to back a national institution that is of huge benefit to the area and to the country, but as political hot potatoes go this is likely to be too hot for the prime minister, David Cameron. Which brings us to new investors with “long-term vision”.

Should Bernie’s latest pronouncement turn into more than hot air, might that vision include a long-term look at the circuits hosting grands prix? Might new owners look at the future and see investment in the classic tracks to ensure they remain on the calendar as part and parcel of what attracts people to the sport? How many young fans of the future will experience a tingle of anticipation at the mention of Baku over Silverstone, Spa or Monza?

Ecclestone has been at pains to point out the deal he has done with Silverstone is very favourable in comparison with other circuits. But perhaps stopping altogether the inflated race fees and escalator clauses that make all but state-backed tracks unable to offer to host a grand prix would create lower short-term profits but a guaranteed long-term stability in the European heartland. It’s not even that visionary a suggestion, requiring only owners that might put the sport before the bottom line.

Powered by Guardian.co.ukThis article was written by Giles Richards in Sochi, for theguardian.com on Thursday 8th October 2015 00.54 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010