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It shows how idiotic the rules can be. No one profits from a test day like this but because McLaren and Ferrari did an installation lap it counts as a day of testing and therefore it will be impossible for them to go on another day.

You can understand why they are against extending the testing, but everybody loses because of this.

It also helped Ferrari with the record for most consecutive years with a victory (1994-2013).

Will it really make a difference compared to CVC?

How F1's ownership could change hands

News of an attempt to take control of Formula 1's commercial rights caused a stir on Tuesday. DIETER RENCKEN looks at how the Qatari-US bid fits into the bigger picture

By Dieter Rencken
AUTOSPORT contributor


Austrian GP 2015

That something was amiss became apparent the moment F1 decamped in the foothills of Austria's snow-capped Styrian Mountains. Even before the cars were presented for Thursday scrutineering, Red Bull's Dietrich Mateschitz - owner of two teams, the circuit hosting the grand prix and a string of media properties - levelled heavy criticism at engine partner Renault via his motorsport organ Speedweek.

That in itself was no surprise, for Red Bull management have long expressed their frustrations about the power unit's lack of performance - even when their own chassis have been lacking - and such were their comments that Mateschitz, a self-made billionaire many times over, must have granted approval for their outbursts, even if only tacitly.

But the big eye-opener came the following day when The Red Bulletin, formerly F1's cheery and frivolous newpaper, but now available via subscription or as insert in more serious publications, made a return to the paddock - immediately taking sideswipes at F1, with, amongst others, a lead column by Niki Lauda entitled "What's Wrong with F1?" Another feature was headed "Curing the Crisis".

Losail circuit, Qatar
Talk of Qatar hosting the 2016 season-opener has gathered pace © LAT
When a shrewd businessman annually spends upwards of £400m on motorsport - with by far the largest chunk being allocated to F1 - then publicly hits out at all and sundry, one cannot help but wonder at the root cause, particularly when such activities include ownership of the World Rally Championship's commercial rights...

"Is he talking F1 down ahead of a grab?" was the obvious question, particularly as Red Bull's ex-F1/current WEC star Mark Webber recently made similarly critical remarks during a videocast. When suggestions did the rounds that F1 CEO Bernie Ecclestone had insinuated the product was "crap" - since denied - there was no doubt something was cooking.

Add in the fact that CVC Capital Partners - current majority owner of F1's commercial rights - sent not one, but two "heavies" to Spielberg, to wit co-founder and -chairman Donald Mackenzie of the venture fund, and Peter Brabeck-Letmathe, last-named being chairman of the Formula One Group, and the plot thickened in sympathy with the dark clouds swirling above the circuit.

The duo worked the paddock on both Saturday and Sunday, gathering opinions about the full spectrum of their investment, including possible threats posed by WEC, but, saliently, busy executives such as these do not jaunt about foreign lands simply to get the low-down on Le Mans.

The wheres, whys and whats of CVC's investment in Formula 1 have oft been analysed in these pages, and it is no secret that CVC generally works to seven- to ten-year acquisition cycles, with November this year marking exactly a decade since it acquired the rights in 2005. A deal blessed by the EU (and FIA) early the following year.

The FIA? Whilst there is regular talk of CVC being the "owners of Formula 1", in real terms the owner of the sport is the governing body, which during the late nineties saw fit to lease the rights to Ecclestone's family businesses for, eventually, 113 years at the fee originally agreed for ten years.

In terms of the deal, the FIA has right of veto over change of control, and, at the time of CVC's acquisition, there was a distinct change of control after its Fund IV acquired shares held by three banks who had assumed control by default. Going forward, though, "control" could well prove elastic, for the lease is now vested in Jersey-registered Delta Topco - the parent company of Formula One Group - and that is unlikely to change.

Back, though, to Austria. All Saturday there was loose talk that Qatar could host the opener of the 2016 season - with some suggesting a pending deal with the world's wealthiest state by GDP was the reason an April date was allocated to Australia, which allegedly holds contracts to host openers through to 2020, but would lose out. Yet there would still remain the stumbling block of Bahrain's veto over grands prix in the Middle East.

Thus, when news broke in the Financial Times that a US-Qatari consortium sought to acquire major stakes in F1's commercial rights, possibly even a 41 per cent share (or higher) by striking a deal with CVC for its 35.5 per cent, and, went the story, acquiring the 5.3 per cent held by Ecclestone, all bits fell into place. Also up for possible grab is the 15 per cent stake held by the estate of failed bank Lehman Brothers.

In addition, Ecclestone's Bambino family trust holds 8.5 per cent, which, if included in the sale, would lift the consortium's potential slice to well nigh 50 per cent - even without Lehman's holdings - with shares vested in various senior employees/directors potentially giving the consortium undisputed control over Delta Topco, and thus F1's rights through to 2110.

That last phrase is crucial to any possible transaction, for if F1's commercial rights remain vested in Delta Topco there would be no change of control even if share ownership within the holding company changes. Thus, depending upon the exact clauses contained within the commercial rights deal, the FIA may not be called upon to approve any transaction.

As it is, CVC holds majority sway within Delta Topco on account of the manner in which various shares (A, B, preferential and non-voting) are structured, and it is entirely possible that any sale by CVC holdings would retain majority control for the owners.

In simplistic terms the commercial rights "lease" is much like a tenancy agreement between FIA and commercial rights holder, in this case Delta Topco - best equated to a parent, with shareholders being the off-spring.

As long as the parents remain in situ and fulfil their share of the deal, the kids may move in and out as they wish and not affect the overall lease agreement. All this is, though, supposition pending sight of the terms and conditions of the original 113-year deal, which document, of course, remains under lock-and-key.

That the FIA may not be required to approve new "off-spring" points to a possible shortcoming in the deal that was struck between the FIA administration under former president Max Mosley and Ecclestone, his friend of 30 years. And a change of president does not alter legal obligations that seemingly leaves the body powerless despite its undisputed ownership of Formula 1 as a sporting championship.

That said, Nasser Khalifa Al-Atya is a vice-president of the FIA's World Motorsport Council and was instrumental in attracting the governing body's 2014 General Assembly meeting to Qatar; thus relations between the country and the FIA are conveniently warm.

What do we know about the Qatari connection? That the sovereign desert state, once under British rule, has invested the bulk of its oil/gas income in real estate and industrial holdings across the globe via various sovereign investment institutions, including taking 13 and 17 per cent holdings in Barclays and Volkswagen Group respectively, large slices of Britain's Sainsbury's supermarket chain and total ownership of Harrods.

One of these funds, which operates separately from Qatar Holdings (the primary investor above), is Qatar Sports Investment, which according to Euromoney, was founded in 2005 with a view to investing in sports and leisure industries, with proceeds to be reinvested into Qatar's sport and entertainment sector.

Qatar is said to be smarting from allegations of fraudulent activity over its successful 2022 FIFA World Cup bid, and hopes investment in F1, in which it would effectively own the sports property as opposed to being at the beck and call of a rights-owning governing body, will deflect a large part of the football scandal.

On the other side, RSE Ventures, the USA partner in the consortium - which, according to sources, has yet to submit a formal bid, although this is believed to be a formality to be completed within weeks - has a strong record in sport-related investments, and enjoys backing from Related Companies, which numbers around 5000 high-end rental properties in New York and the city's Time Warner Center amongst its investments.

In addition, Related manages $1.5bn of equity capital for sovereign funds, and has further property investments across the USA and in Abu Dhabi, Shanghai and Sao Paulo - all well known centres to F1 fans.

RSE is co-owned by Matt Higgins, who currently serves on the executive of the National Football League Miami Dolphins team (having previously been on the board of the New York Jets), and Stephen Ross, owner of Related and the Dolphins. Thus an enormous level of commercial and sports expertise underpins the project, with Qatar providing virtually limitless funding in return for majority shares in the venture.

However, over the next few weeks we could see further potential suitors submit offers to CVC. An offer could well come from a consortium of teams, with the Big Four - Ferrari, Mercedes, Red Bull and McLaren - said to be eyeing a DTM-type structure, whereby teams own and promote the property for their own accounts, possibly in cahoots with Ecclestone. This may explain Mateschitz's (and Lauda's) talking down of F1, as well as recent comments made by Ecclestone.

Whatever, it appears as though CVC's involvement with F1 will shortly reach an end, concluding a period where FOG has been managed primarily for the benefit of fund holders and not the good of F1. The major sticking point could, though, be EU approval, for having given the business of F1 almost free reign over the last 15 years or so, the Commission appears to be heading for a clampdown.

Thus any bid for the rights - whether only CVC's controlling share or majority - is likely to be diligently investigated by the EU. And, that could put a spoke in the wheels of many a suitor, and delay CVC's exit.

BROADCASTING giant Sky and John Malone’s Liberty Global are weighing offers for a £4.5bn controlling stake in Formula One, gatecrashing the plans of a Qatari-backed consortium to take control of the sport.

Last week it emerged that RSE Ventures, a company founded by the Miami Dolphins American Football tycoon Stephen Ross, had teamed up with Qatar Sports Investments, the owner of French football club Paris Saint-Germain, to work on a bid for the global motor-racing series.

But insiders say the RSE-Qatari team is just one of several buyers in contact with CVC, the private equity firm that owns the F1 stake.

City sources said Sky and Liberty, which have long coveted F1, have held informal discussions with CVC about a deal. The Canadian fashion tycoon Lawrence Stroll, who helped to build the Tommy Hilfiger and Michael Kors brands, has also been linked with a bid.