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SBD Global/October 26, 2012/FinancePrint All
F1 CEO Bernie Ecclestone "faces being sued for $400M" by the German bank BayernLB, which "is demanding compensation over the sale of F1 to the equity company CVC in '06," according to Paul Weaver of the London GUARDIAN. BayernLB, which has approached Ecclestone's lawyers in Germany, "claims that its shares were undervalued when it sold its 47.2% stake to CVC for £520M." BayernLB former Chief Risk Officer Gerhard Gribkowsky, who was charged with F1's sale, "was jailed for eight-and-a-half years in June after being convicted of tax evasion, bribery and a breach of fiduciary duty over his involvement in the sale." Gribkowsky alleged that "he had received $44M from Ecclestone to undervalue the shares, but the 81-year-old Englishman denies that the payment was a bribe." The "cloud has been hanging over" Ecclestone all year. Ecclestone said, "There's nothing to worry about. I'm not worried. I'm aggravated with the nonsense I'm being put through for all this. I sold the bloody shares for the bank. It was something they couldn't sell. They had six people look at it and wouldn't buy. I got them out of trouble, and now I'm in trouble. Life is like that sometimes." Ecclestone also said that "the German bank would have to come to England if it wants to get its money." He said, "I live in England" (GUARDIAN, 10/25).
Arsenal majority shareholder Stan Kroenke "declined to rule out introducing a dividend policy, as the club’s directors struggled to contain fans’ anger at the team’s trophy-less record of recent years and indifferent form this season," according to Roger Blitz of the FINANCIAL TIMES. Kroenke made "a rare public appearance" at the club for its annual meeting, telling shareholders that there was "money available for transfers and that it would reinvest in the team’s playing squad." Kroenke declined to answer if shareholders "would be able to draw dividends -- which supporters oppose." Kroenke said: “This club is run through the board. I have always been respectful of that process.” The Arsenal Supporters’ Trust, which represents small shareholders, said that "one of its founding principles was that money should not be taken out of the club." The Arsenal Supporters' Trust said: “We are very alarmed that Stan Kroenke is refusing to commit to upholding this policy, and we will ask Arsenal for a clear statement on this” (FINANCIAL TIMES, 10/25).
Nike has been fined 4.87M yuan ($779,000) for selling sneakers in China "at a higher price and of a lower standard," according to the CHINA DAILY. Nike set the price for one of its basketball sneakers, which it advertised with double air cushions inside, at 1,299 yuan ($208) in China, "more than 500 yuan ($80) higher than the same one in other countries." It was later discovered the company "misled customers with an advertisement as the footwear only contained one air cushion." The Beijing Administration for Industry and Commerce said that Nike "applied double standards between Chinese consumers and other places" (CHINA DAILY, 10/25).
Scottish Premier League Dundee United's financial results for the year to June show the club posted a profit of £1.45M ($2.2M), with "bank debt and directors' loans having been reduced," according to the BBC. Revenue suffered a 3% fall to £5M ($8M), and the percentage of wages to turnover ratio increased from 74% to 76%. United Chair Stephen Thompson feels the SPL is "thriving" despite Rangers' absence. Speaking on Dundee's website, however, Thompson said: "The current and forecast economic situation continues to present challenges, and whilst the board remains committed to ensuring a team capable of producing performances on the park and entertaining the supporters, we must also ensure that a prudent fiscal policy is maintained." Dundee reduced its bank debt from £5.4M to £3.93M ($8.7M to $6.3M) and said that a £225,000 ($362,000) reduction was made in July (BBC, 10/25).