US-Qatari move to take over Formula One
The Abu Dhabi Formula One Grand Prix at the Yas Marina circuit
The owner of the Miami Dolphins, the American football team, is teaming up with Qatar to take control of Formula One, in a $7bn-$8bn deal that could see the sport finally break into the US market.
RSE Ventures, a company founded by the 75-year-old property and sports tycoon Stephen Ross, wants to buy 35.5 per cent of the holding company that owns F1 from Europe’s largest buyout group CVC Capital Partners. It is being backed by Qatar Sports Investments, which also owns the Paris Saint-Germain football club.
Any deal would see Bernie Ecclestone, F1’s chief executive, also sell his holding of roughly 5 per cent. “My shares will be sold together with theirs,” he said. Qatar is believed to want to ultimately buy the whole of F1.
While some speculated that the sale could end the 84-year-old’s grip on the sport, a person close to the talks said RSE was keen to keep him involved and had discussed the idea with him.
“They believe he brings a lot to the sport and they can help expand it into the US and Chinese markets,” the person said.
RSE is believed to be a few weeks away from a formal bid and in the diligence stage. CVC said it had not yet received a bid and declined to comment on the talks. Mr Ecclestone said he was not yet aware of a “deal on the table”. The FIA, the motorsport regulator, has not yet received an application to approve the transaction.
The last major public attempt to buy into F1 came last year when Liberty Global and Discovery Communications tried but failed to buy a 49 per cent stake.
Mr Ross is chairman of Related Companies, an international property group with more than $20bn of assets which helped to develop New York’s Time Warner Center.
Mr Ross also owns the NFL’s Miami Dolphins and has been in talks over bringing a Major League Soccer team to Miami together with David Beckham.
RSE Ventures, a sports and entertainment venture firm, was formed in 2012 when Mr Ross partnered with Matt Higgins, who was chief operating office of the company responsible for leading the rebuilding effort of the World Trade Center site in New York.
One person connected to Qatari interests in other sports said that F1 was an obvious gap in the country’s sporting portfolio.
Another person said that Qatar had accelerated its interest in F1 after being stung by the ongoing scandal at Fifa over the 2022 World Cup.
Qatar believes that sport is an essential long-term commodity, like property, and Mr Ross’ team believe that F1 could be commercialised further, especially in the US.
CVC has controlled F1 for nearly 10 years, but has sold down its stake, most notably in 2012 when it sold $1.6bn of equity to BlackRock, Norges Bank and Waddell & Reed. None of these three could be reached for comment
It has been one of the most successful bets in CVC’s history, returning roughly five times its initial investment. But an attempt to float on the Singapore stock market in 2012 failed and there has been constant speculation over CVC’s exit ever since.
At the end of last year, Donald Mackenzie, CVC’s co-founder, called F1’s most important team bosses and stakeholders to a shooting party at his estate to discuss the future of the sport.
He told them that Mr Ecclestone, who was not present, had been “left alone for too long” and that he wished to bring in Paul Walsh, the former chief executive of Diageo, alongside him.
But at the board meeting that followed, Mr Walsh was only left with a non-executive role. “Bernie had dinner with him and told him to piss off,” said one F1 board member.
“Motor racing without Bernie would be different and Bernie without motor racing — well I think that is something he would not want. He is part and parcel of it and I do not think he could let go his involvement, even if there is a new management structure,” said Sir Jackie Stewart, the former F1 champion driver and team owner.