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Qatar, U.S. Consortium 'Ready' To Bid On Formula 1 In $8B Deal

The owner of the NFL Miami Dolphins "is teaming up with Qatar" to take control of F1, in a $7B-$8B deal that "could see the sport finally break into the US market," according to Moore, Massoudi, Kerr & Cotterill of the FINANCIAL TIMES. RSE Ventures, a company founded by the 75-year-old property and sports tycoon Stephen Ross, wants to buy 35.5% "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 Ligue 1 side Paris St. Germain. Any deal would see F1 CEO Bernie Ecclestone "also sell his holding" of roughly 5%. He said, "My shares will be sold together with theirs." People close to the talks said that QSI "is believed to want to ultimately buy the whole of F1." Even if  Ecclestone does sell his shareholding, a person close to the talks said that RSE "was keen to keep the 84-year-old involved and had discussed the idea with him." RSE is believed "to be a few weeks away from a formal bid and in the diligence stage." CVC said that "it had not yet received a bid and declined to comment on the talks." Ecclestone said he was not yet aware of a "deal on the table." The FIA "has not yet received an application to approve the transaction." Qatar believes that sport "is an essential long-term commodity, like property," and Ross’ team believes 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 '12 when it sold $1.6B of equity to BlackRock, Norges Bank and Waddell & Reed (FT, 6/23). In London, Kevin Eason reported the details "emerge at a crucial time for F1, which is involved in a massive bout of navel-gazing over its future." There will be "many hurdles to come, including the due diligence demanded of deals this size." There can be no doubt about F1's profitability, even at this "lean time; F1 has been CVC’s most successful acquisition," reaping an estimated £5B (LONDON TIMES, 6/23). REUTERS reported a source said that Dieter Hahn, chairman of the supervisory board of German sports marketing media group Constantin Medien, "is also involved with the investment consortium." Reuters, however, could not "immediately verify what his precise involvement was." The source said, "The key to unlocking this deal is that under Bernie, F1 doesn't do much TV rights marketing. Hahn will help with that." Goldman Sachs is working with CVC on the deal, while JP Morgan is working with the buyside investors (REUTERS, 6/24).

F1 IN DECLINE: In a separate piece, Eason opined an hour before Sunday's Austrian Grand Prix "and the paddock of the Red Bull Ring was as near to deserted as it is possible to get." Some of the huge motorhomes "looked as though they were shut for early closing." One acquaintance who deals in these things said that "the fabled Paddock Club, where the diners feast on champagne and fine food, was a quarter full." The drivers "could cross the paddock unmolested, almost unnoticed, as they went to collect their cars ready to race." This "must be what a manic depressive sport looks like." Mercedes Motorsport Dir Toto Wolff said that "the British press is too negative about Formula One." I "see, interpret and recount my findings." I "am not a fan, I am a journalist." If my boss "sent me to cover a nest of vipers, I would send a description of the fetid nest and attempt to judge the quality of the bites by the participants." F1 "has done a lot of damaging sowing in the past couple of years and the harvest was on show there in Spielberg on Sunday: the crowd halved, the paddock empty and corporate Europe turning its back on what should be one of the most enticing of global sports." CVC Capital Partners Chair Donald Mackenzie "was in Spielberg with Peter Brabeck-Letmathe, chairman of the F1 board of directors." Are "they blind?" Do "they care?" Under Mackenzie’s watch, F1 "has been on a slow slide, now evident in every corner of the paddock with disaffected teams and sponsors spurning the sport." Even "the drivers are miserable" (LONDON TIMES, 6/23).

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