Monday, October 13, 2008

The Nationalisation of F1?

The commercial rights to F1 are owned by a private finance company called CVC. When CVC purchased these rights they did not, of course, do so with their own money, but with money lent to them by other people. To be precise, they borrowed £1.4 billion from Lehman Brothers and RBS.

In 2007, CVC's F1 holding company, Delta 3, made a loss of £235 million, which included £130 million in interest payments on the loan. Only £47.4 million of the loan itself was paid off.

The fate of Lehman Brothers is well-charted, and it seems that RBS will be nationalised today. If CVC defaults on its debt re-payments, then F1 will fall into the ownership of the lending banks once more. Only this time, at least some of those lending banks will be owned by the taxpayers of the United Kingdom.

Which, you'd have to say, is a somewhat unexpected eventuality...

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