F1 Stock Offering Faces Obstacles image

Financial managers are continuing their plans for a public stock offering Formula 1 in Singapore.

CVC Capital Partners, which owns 63.4% of stock, and CEO, Bernie Ecclestone, push the offering hoping to generate as much as $2 billion. But, there are still important problems to be solved, such as the spat between Ecclestone and Mercedes-Benz, one of the sport’s leading participants. The commercial-rights group controls the financial side of Formula 1, while teams are represented by Formula 1 Teams Association and the sporting side is controlled by Fédération Internationale de l’Automobile (FIA).

The Concorde Agreement, first executed in 1981, is the document through which oversight of the complex relationships is managed. The document is renewed periodically, the most recent edition went into effect in 2009. The seventh version is to go into effect next season, but terms have not been agreed upon by all parties. It is believed that Ecclestone tries to divide and conquer the teams association by offering special perks to some of the teams, including Ferrari and Red Bull.