F1 was too expensive for FIAT

In May 2011, Exor, the parent company of FIAT and Ferrari, issued a statement announcing a feasibility study for the acquisition of F1, alongside News Corp. However, it was three investment funds that subsequently acquired 21% of F1. The Agnelli family decided not to proceed as the asking price was too high to be financially attractive for them.

John Elkann, the CEO and heir of the Italian conglomerate, acknowledged this during a meeting with shareholders: « We looked into the opportunity to invest in Formula One but did not move forward on the matter because the pre-IPO price was too high. »

It should also be noted that Exor could not rely on its financial partner in the operation because News Corp was caught up in the News of the World media scandal. This affected the entirety of its visibility and significant investments, starting with the takeover bid for the satellite broadcaster BSkyB.

Aside from this aspect, the conglomerate led by Rupert Murdoch no longer necessarily had an interest in pulling out its checkbook to acquire a stake. Indeed, constrained by its spending reduction plan imposed by the British government, the BBC was forced to give up part of its broadcasting rights for F1 to Sky, the commercial spearhead of the Australian businessman.

Since then, Ferrari’s political position has also significantly evolved as the Scuderia managed to reach an agreement in principle with Bernie Ecclestone on the definition of the new Concorde Agreements. It includes a much more generous financial distribution due to its historical heritage in the sport. However, it seems that it is not currently planned for the Prancing Horse to receive free shares in F1 when (and if) it is floated on the stock exchange, as Bernie Ecclestone and CVC Capital assume that if Ferrari wishes to obtain shares, it is free to acquire them on the market. Nothing is free in this world…

With the participation of RacingBusiness.fr