05/09/2008
NEWS STORY
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We all know that F1's billionaire boss Bernie Ecclestone has many projects up his sleeves, and though some fall out with a bit of fanfare, most have to be hunted down. One such project was pinned down in today's Evening Standard by Pitpass' business reporters Christian Sylt and Caroline Reid.
The newspaper reveals that Ecclestone is on the verge of launching the long-awaited GP3 series and not only has he set up a string of weird and wonderfully-named companies to run it, but he has also got a brand new logo to go with it. The paper reports that the logo mirrors that of GP2 and to prove the point just cast your eyes above.
The Evening Standard reports that GP3 is revving up at just the right time with GP2 teams' annual budgets at around £2.5 million with, crucially, over half of this coming from the drivers. That's some hurdle for wannabe racers to surmount, never mind getting good results on track. It is estimated that GP3 team budgets will be around £325,000 and F1's owners CVC wouldn't have to invest much to get it off the grid if the cars are owned by the teams as is common with these type of series.
It could be just what CVC needs to boost revenues as it is currently paying back well over £100 million per year on the debt that it took out to buy F1. It has put one heck of a cat's cradle of companies in place to run the new series.
A pan-European trademark application for the GP3 logo has been made by Epsilon limited, a company located in F1's London headquarters. Epsilon is owned by the Jersey-based Omega Group Holdings which also just happens to own a company called Gamma Topco - the owner of GP2. Omega maybe mysteriously-named but the Greek letters give the game away and in fact the shares in the business are owned by two Jersey companies called Alpha Topco and Delta Prefco. Both of these companies are ultimately owned by the Jersey-based Delta Topco which holds the commercial rights to F1.
The GP3 trademark application covers a whopping 26 categories including one which crucially includes "sporting and cultural activities." The application was filed by Epsilon on 20th August - just two days after the company was set up, so this is certainly a project currently on Ecclestone's mind. Indeed, Pitpass readers may remember that Ecclestone's private company also owns a different logo for GP3 which it took over from another firm. Commissioning the new logo shows that things are moving forward and there may be good reason for this.
The idea of a low-cost entry point into F1 most recently raised its head in June when beleaguered FIA president Max Mosley announced that he would introduce an F2 series next year with a budget of £150,000 for each of a team's two cars.
This move was widely seen as an attack on GP2 due to Ecclestone's suggestion that Mosley should resign following his role in the sex scandal that rocked F1. He has since backtracked on this but Mosley hasn't let the war of words drop and recently commented that Ecclestone could be replaced if CVC sold its F1 investment since "the whole business depends on a man who is 78 years old."
Ecclestone took over the running of F1 in the 1970s but wasn't involved with the sport when it began in 1950. GP3 would be only the third racing series Ecclestone has launched in his career but may not be the last.
Following Mosley's recent comments about Ecclestone, CVC rushed to his aid releasing a statement saying that "there are no plans to replace him and we are delighted with the results of the business under his management." It added "we have no plans to sell our stake in Formula 1."
The sceptics among us may say that this statement seems eerily similar to one put out by Formula One Management on 30 August 2005 when it said that although it had received approaches about buying the company "the answer has been that the company shares are not for sale." It was sold under three months later with CVC as the buyer.
According to CVC's documents, the company typically targets a three to five year holding period for its investments but the news that it is building up the F1 empire with GP3 seems to suggest that it isn't backing out.
With F1 sitting on billions of dollars of debt there are only few potential buyers with pockets deep enough to give CVC the return on its money that it would surely want. One possible buyer is a Middle Eastern wealth fund the likes of that which snapped up Manchester City Football Club earlier this week. Perhaps ironically Mosley mentioned last month that he had spoken to CVC about the possibility of a sovereign wealth fund buying F1. However, the sex scandal he was involved in may have put off buyers from the East with the Crown Prince of Bahrain famously banning Mosley from the Grand Prix there earlier this year.
But the man down the pub isn't yet able to breathe a sigh of relief - despite the launch of GP3 being an endorsement of F1 by CVC, the sport's future may not be secure. At least not in its current guise.
Ecclestone's private company also owns the intellectual property to the name GP1 and Pitpass regualrs will also remember that he has in the past mixed up the F1 name with that of GP1 when being interviewed. More than a slip of the tongue perhaps?
It was recently mooted that GP1 could be the brand to a non FIA-run series which would get off the grid if the teams refused to work with Mosley. With feelings towards Mosley calmer now this seems unlikely but the GP3 launch could suggest the plan is not yet dead. After all, does it really make any branding sense to have GP3, GP2 and F1? One thing that seems sure is that, for the time being at least, the pinnacle of motorsport will be run by a company with a very strange name.