News Corp Formula One bid unlikely to get green light?

You can see why News Corp would be interested in Formula One. But the feeling's not mutual, according to Bernie Ecclestone.

Last Updated: 17 Jul 2013
There's been much excitement today about Sky News's revelation that News Corp, the owner of BSkyB (and thus Sky News), is mulling some kind of bid for Formula One motor racing. However, this supposed interest comes with all sorts of caveats attached: there are, as yet, no firm details on timeframes, financing, partners and so on, which presumably puts this on a par with various other potential deals of which News Corp is currently kicking the tyres. Perhaps more to the point, F1 supremo Bernie Ecclestone insists that it's not for sale - and even if it was, selling it to a media company like News Corp wouldn't make any sense.

According to Sky News, News Corp has been in preliminary talks about F1 with Carlos Slim, the Mexican zillionaire who already has a financial interest in the sport, and one of the big car manufacturers, with JP Morgan acting in an advisory role. This apparently might lead to a consortium bid, or it might lead to News Corp bidding for the media broadcast rights. It's easy to see why the media giant might be interested: F1 has a huge global audience, and has proved a huge money-maker for Bernie and its private equity owner CVC (who apparently were unaware of News Corp's interest until today). Supposedly, News Corp thinks there's an opportunity to broaden its appeal among younger fans.

However, there are all sorts of reasons why this deal seems unlikely to get off the starting grid. For a start, News Corp already has its hands full with this controversial bid to take control of the chunk of Sky it doesn't already own, which apart from anything else could make financing another huge deal tricky.

Equally, Bernie says F1 is not for sale - and since he can effectively block any deal, that represents quite a big stumbling block. Now we're generally inclined to take such protestations with a pinch of salt, since most things are for sale if the price is right. CVC will want to cash in its chips at some point, since that's how private equity firms operate - and presumably even Bernie will want to retire to count his money at some point.

But perhaps the more pertinent point was the one Ecclestone made to the Times: that even if F1 was for sale, it wouldn't make sense to sell to a media group, since it would restrict the sport's ability to negotiate with (read: demand top dollar from) other broadcasters. Selling to a pay-TV group would be a controversial move too, given how zealous the sport has always been about remaining free-to-air.

Of course, while the consensus seems to be that News Corp's interest is genuine, it's clearly at a very early stage and all very speculative - which could mean that it comes to absolutely nothing. After all, its top brass presumably mull all kinds of potential deals every day. And on the basis of the reaction to this story, it may decide that some of the other stuff in the pipeline is a more sensible use of its time and resources.

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