F1 "is in crisis as it faces up to" a $2B bill that "it cannot afford to pay and which could spell the end for a number of teams," according to Paul Weaver of the London GUARDIAN. The warning came "from one of the sport's biggest players," McLaren Team Principal Martin Whitmarsh, who is also chairman of the Formula One Teams' Association, on the eve of the Monaco Grand Prix.
The teams, which "are absorbing the terms of the next Concorde Agreement, are already angry" that the private equity firm CVC Capital, which holds a controlling stake in F1, takes out more than half of the sport's $1.5B income. With so much money going out, the teams "cannot cope with rising costs" and Force India Deputy Team Principal Bob Fernley claimed CVC is "the worst thing that had happened to the sport."
The 11 teams "pay a fortune to be involved in" F1. Whitmarsh said the situation "really is a threat to the sport." He added, "I cannot see in their shoes [the seven smaller teams] how you can construct a sustainable business model."
These seven teams "are already incensed that most of the money goes to the four biggest operations, Ferrari, Red Bull, Mercedes and McLaren." CVC is "scheduled to increase payments to the teams" from 47.5% to 60% of the sport's income, but the extra money "will go to the big four." Fernley said: "There should be a more equitable distribution" (GUARDIAN, 5/24). In London, Sylt & Reid reported CVC "is planning to pay a dividend of about" $290M after the motorsport company lists its shares on the Singapore Stock Exchange. The flotation prospectus for F1 reveals that "once the business is listed it is expected to pay a dividend of 80pc of its adjusted total security-holder benefit" -- the net profit after factoring out inter-company loans. This came to $358.3M on revenue of $1.5B in '11, according to F1's most recently filed accounts, putting the 80% dividend at $286.6M (TELEGRAPH, 5/25).
