CVC to drive Formula 1

CVC Capital Partners, Europe’s largest private equity investor, has agreed to purchase a majority stake in Formula One Group from Bayerische Landesbank and the Ecclestone family trust for an undisclosed sum.

CVC Capital Partners is the new controlling shareholder of Formula One Group, having bought equity in the business from existing shareholder Bayerische Landesbank and Bambino Holdings, the investment trust that manages the wealth of Formula One impresario Bernie Ecclestone’s family.

Bambino will retain a stake in the venture, in which Ecclestone and the Formula One management team also participate. Ecclestone will continue in his current role as CEO. Donald Mackenzie, a senior figure at CVC, will join the company’s board.

Minority stakes in the business are still being held by JPMorgan and Lehman Brothers, according to press reports. Discussions over the future of these positions are reportedly ongoing.

The two banks, along with Bayerische Landesbank, became involved in Formula One after the collapse of German media conglomerate The Kirch Group, a large shareholder in the business at the time of its bankruptcy in 2002. When Kirch was unable to repay loans to its lenders, the latter took control of its motor sport interests.  

CVC is also an investor in Dorna, the Spanish manager of the FIM Road Racing World Championship Grand Prix (MotoGP).

Formula One, which following the buyout will trade as Alpha Prema, is currently renegotiating the Concorde Agreement, a key contract codifying its economic relationships with the racing teams and leading car manufacturers including BMW, Renault, Honda and Toyota. The car groups are pushing for a greater future share of Formula One’s revenues and have threatened to set up a rival car racing franchise if their demands are not met.  

CVC’s Mackenzie said in a press release that the firm had “given its full support to the current discussions between Formula One, the teams and manufacturers to enable a successful extension of the current Concorde Agreement.”

No one at CVC was immediately available for further comment.

Earlier this year, the firm closed its latest private equity fund capitalised at €6 billion.