F1 may be making more money, and sharing it more widely among the competing teams, but series owner CVC Capital Partners continued to make losses on its acquisition, according to financial reports.

While turnover on the sport's commercial activities topped $1bn in 2010, and the teams shared $658m, CVC's loss from its involvement in F1 grew to $660m due to the financing costs relating back to its acquisition of the series in 2005. According to the latest Companies House filing, the private equity and investment giant is still paying off the $2.8bn it borrowed from the Royal Bank of Scotland and Lehman Brothers to fund the acquisition.

The teams, however, continue to benefit from CVC agreeing to raise prize money pay-outs. The move, designed to avert the threat of a breakaway series, resulted in a 164 per cent increase in monies paid to teams between 2007 - the last year of the previous Concorde Agreement - and 2010, with a $114m - or 21 per cent - increase last year alone. Exactly who got what, however, remains one of the most closely-guarded secrets in the sport, with a complex matrix determining how the pie is divided, according to performance during the season as well as discretionary payments to both long-serving competitors and those entering the sport in 2010, the latter a major factor in the increased payout as F1 paid $30m to swell from ten teams to twelve.

While those involved in the sport attempt to improve the show for fans, the F1 audience continues to grow as new events are added to the schedule. The advent of the Korean GP and return of Canada both helped to boost sales by two per cent, to $1.08bn. Net income realised $296m, up $19m on 2009.

Bernie Ecclestone isn't doing too badly out of the situation either, with a separate financial filing suggesting that his personal earnings also rose by a 21 per cent, to $7.9m.

Buried among the figures, meanwhile, was the revelation that, as of January, a new company Formula One World Championship Ltd, had acquired the entire commercial rights previously held by Formula One Administration. FOWC is listed as a sister company to FOA, both being wholly owned by SLEC Holdings. The move is thought to have been made to coincide with the start of the new 100-year agreement covering the sport's commercial activities. FOA also sold all of its assets to the subsidiary Formula One Management Ltd for $102m, and is now expected to be wound up.

F1 insider Joe Saward also reveals that various companies were also disposed of to FOA director Sacha Woodward Hill, without being able to offer an explanation. Among them is Petara Ltd, the holding company of Formula One Management, which was acquired for ?1000 last September. Prior to that sale, however, Petara had paid out $28.7m as a dividend and had no business or assets. It was later dissolved.

Saward notes, however, that Petara is the company in which German investigators have been following since accusations of financial wrongdoings took place during CVC's acquisition of F1 came to light. Chief among these is an alleged $50m 'kick-back' to banker - and former SLEC chief - Gerhard Gribkowsky for handling the deal for a 48 per cent stake in the sport owned by Bayerische Landesbank. CVC has already said that it has no knowledge or involvement in any such payment., and has launched its own investigation into the matter [see story here].



Loading Comments...