Really? OK, have a seat.
They consolidated shares from four different sources, three banks and Bernie. I've read that both Bernie and a spinoff from Lehman Bros. still have small stakes.
It all started when Bernie paid a $300 million for the commercial rights long ago. Max gave him a 100 year deal. There were hints that Bernie later gave Max a $250 million gift. Birthday present.
Bernie then sold 50% of his company to two investment companies for $850 million. EMTV bought those shares from the investment companies for $1.1 billion. EMTV went bankrupt and Kirsch Media bought those shares, and another 25% from Bernie for $600 million.
Then Kirsch went belly up. So his creditors - Bayerische, Lehman, and Morgan Stanley - took over their 75%. CVC then came along and bought those shares from the banks, along with Bernie's remaining 25%. The numbers from that purchase vary, but $2.8 or $2.9 billion is what Sylit uses. I've read different things about where that money went. Some say the purchase price was $1.35 billion total, with the rest of the loan used as an early payout to CVC; others say that the $1.35b was just for Beyerische and Morgan Stanley's shares, Bernie's 25% cost another $1b, Bernie's Allsport was another $300m, and then the Lehman stake cost $600m. The latter is what I believe.
By the way, the original $300m loan to buy the commercial rights was never paid by Bernie, so that debt went to CVC also.
I don't buy this latest story from Sylit - in fact there's very little of what he writes that I trust. The problem is that almost everything written about F1 finances is done by him, regardless of where you read it. Probably because he's the only one who cares. It's a confusing mess, and I think Sylit's articles make it all just that much more opaque.
OK, so he has a much longer article about this over on pitpass, and I think the Independent did well to edit most of that down. In fact I think they stopped four paragraphs too soon. In the pitpass article, Sylit is making claims about CVC paying back a large chunk of their debt, and I don't see how that's possible considering that they're running at a loss. At best they've refinanced with lower rates. I do not believe that their current loan is variable, and I certainly don't believe that a loan of that size and risk could be had at libor+2. That's crazy. My suspicion is that Sylit has forgotten that the loan is a PIK loan, and that most of the the payments made last year were in kind - meaning that while they might look like huge paydowns, they are really just swapping interest for debt. If I'm right, then their total debt actually went up last year and not down.
I'm of the opinion that CVC has yet to make a dime on F1. I think they paid way too much, expecting more races, and smaller - not larger - payouts to the teams. There was a time after the purchase that Bernie was saying that the teams would need to take a 50% cut in their payouts. For the good of the sport. That obviously didn't happen.
Either that, or the books are so cooked that we'd never be able to figure out what's really going on.
