Still no life in News Corp's phantom F1 bid

24/07/2011

You've got to hand it to Sky News. The channel is owned by broadcaster BSkyB, which in turn is controlled by Rupert Murdoch's News Corporation through its 39.9% shareholding.

Over the past few weeks as a result of the phone hacking scandal engulfing News Corp the company has been forced to drop its bid for the remaining 60.1% of BSkyB. As a spokesperson for UK Prime Minister David Cameron said, News Corp should instead "focus on clearing up the mess and getting its own house in order."

It all makes sense given the chaos which currently surrounds News Corp so it put a wide smile on the face of Pitpass' business editor Christian Sylt when he read a recent post by Sky News blogger Mark Kleinman which 'exclusively' reveals yet another "key player...working with News Corporation and Exor, the Italian firm which controls Fiat, on their interest in acquiring F1."

Yes, that's right, even though News Corp has been forced to drop its bid for a company it already controls, Sky News is still talking about it buying another business. This of course is despite the fact that in the three months since Sky News first promoted the idea, News Corp has not even made a bid for F1.

We shouldn't also forget that F1's majority owner CVC has told News Corp's deputy chief operating officer James Murdoch that F1 is "not currently for sale." This is of course the same James Murdoch who, as Pitpass reported, recently revealed that he isn't aware of who F1's chairman is. It is also the same James Murdoch who MP Tom Watson said he is reporting to Scotland Yard over allegedly giving false evidence about the phone hacking scandal to the Culture, Media and Sport Committee at the House of Commons earlier this week.

Indeed it is the same James Murdoch who was believed to have been driving the phantom F1 bid but has been called on, by MP Chris Bryant, to be suspended from his News Corp role. In his letter to News Corp's non-executive directors, Bryant said there had been a "complete failure to tackle the original criminality at the company" and "the lackadaisical approach to such matters would suggest that there is no proper corporate governance within the company."

Some observers have suggested that News Corp could be forced to cut its holding in BSkyB to below a controlling 29.9% level, or even down to zero, as a result of the scandal. In short, News Corp could be forced to sell its own company (let alone be prevented from buying more of it) but if we take Sky News' latest F1 tidbit at face value, we are told that it is regardless planning to buy F1.

There has been a string of stories from Kleinman about parties allegedly working with News Corp on an F1 bid - from boutique investment banks to billionaires and now a private equity executive called Scott Lanphere who was a director at investment firm Morgan Grenfell which bought 12.5% of F1's parent company SLEC in 1999. The only one of these "key players" which has actually come forward and confirmed it is involved with News Corp in connection with F1 is the Exor investment fund which ultimately owns a stake in Ferrari.

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