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The "What is Bernie up to?" thread.
04-01-2016, 05:45 PM
Post: #1
The "What is Bernie up to?" thread.
starters

http://www.theguardian.com/sport/blog/20...are_btn_tw

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04-01-2016, 05:59 PM
Post: #2
RE: The "What is Bernie up to?" thread.
what i find so confounding is how cvc is making such a profit on their investment. viewership is down, fan satisfaction is down, team sponsorships are down, why is the share value going up? it reminds me of the american housing bubble in 2007, when the loans were defaulting and yet the CDOs' trading price went up. am i missing something big that is propping up the value of f1's commercial rights, or is someone (sky tv, grand prix purchasing governments, whoever cvc sells to) getting suckered?
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04-01-2016, 06:11 PM
Post: #3
RE: The "What is Bernie up to?" thread.
They are taking everything, little of which has to do with viewer-ship or fan satisfaction. Bernie can extract $40 million from a circuit to host a race, no matter who turns up. He can make TV companies pay £600 ($1,000 million) for a 10 year deal. On track advertising all goes to them and it's his favourite Rolex.

It is outrageously clever that he has created a business that he can sell to these people as a must have and then go off telling the world how crap it is. Utterly mind blowing.

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04-01-2016, 06:45 PM (This post was last modified: 04-01-2016 06:45 PM by frankdouglason.)
Post: #4
RE: The "What is Bernie up to?" thread.
the value that a government sees in hosting a race, and that a broadcaster sees in carrying a race, and that a sponsor sees in branding a race SHOULD be connected to viewership and fan satisfaction. that's the model that it's all built upon: people have fun watching the race, and we want to associate that fun with our country/network/company as well as pass that value on to businesses that work with us, so we rent the ability to do that. but if f1 doesn't command the same attention, or carry the same prestige/enjoyment/insert-positive-adjective, then the value should go down.

if it was a new thing that bernie is fleecing everyone else in the series and funneling the money to himself and his investors, then i could see how that fleecing could prop up the value of f1 while it's in a downturn. but it's not new. bernie has been doing this for a long time - before cvc made their initial investment - so i don't see why that would impact the value. it seems to me that either there's some new influx of revenue that makes up for the downturn, or f1 is an inflating bubble of overpaying licensors.

i realize sky is paying more than bbc did, but that's nowhere near enough for 350% growth on the entire commercial value of f1, obviously. the big growth in circuit hosting fees happened years ago, when the calendar ballooned and there was the big push into asia and the middle east. it seems to have pretty much leveled off lately, with some new venues being mostly offset by losing others, as well as the traditional venues being squeezed and not being able to keep ponying up the dough.

i keep coming back to a suspicion that broadcasters, promoters, and new investors are all going to end up regretting their deals if f1 doesn't turn itself around, and i have very little hope of f1 getting back on track before bernie dies.
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04-01-2016, 07:06 PM
Post: #5
RE: The "What is Bernie up to?" thread.
The reason Bernie has so much equity in this environment is that he, up until CVC appeared, was creating money for everyone. He took his enormous cut but then the teams got an even more enormous cut. Everyone was happy and getting richer and richer. Ron, Frank and the rest would not be millionaires without Bernie. But now CVC are taking it, as much as possible, and while the teams still get huge amounts, the huge amounts CVC get are proportionally greater.

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04-01-2016, 08:04 PM
Post: #6
RE: The "What is Bernie up to?" thread.
when did that shift happen? it must be one of the concordes, right?
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04-01-2016, 10:54 PM (This post was last modified: 04-01-2016 10:56 PM by leonbray.)
Post: #7
RE: The "What is Bernie up to?" thread.
It all started with the proposed breakaway series and Bernie getting a new concorde signed. It was the exacerbated by shareholders who thought they were being ripped off or had been burned by overcommitting.

From around 2004 CVC started buying out the various shareholders until there was only CVC, Bernie and a couple of minor shareholders, who get 36% of revenue

Good old wikipedia has a description of the convoluted route to the current ownership

https://en.wikipedia.org/wiki/Formula_One_Group

Saward published this a while back on the revenue allocations

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04-02-2016, 12:16 AM
Post: #8
RE: The "What is Bernie up to?" thread.
so cvc gets 36.1%. that's much less than i expected.

one thing i don't understand on that chart: the top says that it starts with profits (not revenues), yet just above cvc getting their payout is a stop for expenses, taxes, and debts. what does that mean? what are those expenses that don't count toward the commercial rights holder group's expenses?

but what i really want to know is whether that 1.8b at the top has gotten bigger or smaller over the years that this system has been in place, and whether the 650m going to cvc/bernie was bigger or smaller (and to what degree) before that system was put in place. cvc is claiming to have more than quadrupled the value of f1's commercial rights in the past decade. i want to know what makes them think that, or perhaps more accurately, what makes anyone looking to buy their share think that.
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04-02-2016, 12:41 AM
Post: #9
RE: The "What is Bernie up to?" thread.
When you report earnings, the first number is EBIT - earnings before interest and taxes.

Throwback to working out how efficient the company is - ie how efficient are its operations. Also tax rates vary depending on the type of operation of the group entities so it is difficult to work out who is more efficient within a group holding

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04-02-2016, 01:33 AM
Post: #10
RE: The "What is Bernie up to?" thread.
okay, good info, thank you. so that 650m is going to be chipped down a bit, but probably not much because cvc probably has really good credit (so they get low interest rate loans) and they probably have the whole tax evasion game down, what with double irish and all that jazz.
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04-02-2016, 05:33 AM
Post: #11
RE: The "What is Bernie up to?" thread.
Total revenue is obviously much higher. The operating profit is what is left after FOM takes the expenses for team travel, the cost of running the TV operation and running the Paddock Club, trackside advertising etc.

You can bet some of those operations are in themselves profitable and that money doesn't go back into the distribution pool.

I still think it is obscene that running 20 cars in 20 races costs 2 billion.

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04-09-2016, 04:12 AM (This post was last modified: 04-09-2016 04:12 AM by Koala.)
Post: #12
RE: The "What is Bernie up to?" thread.
From memory Slavica got a chunk of the rights when she divorced Bernie didn't she?

Which led me to wonder if he is still married to his most recent wife Fabiana which a quick search confirmed he is - here is a happy snap of the couple in December though it does look like a father escorting his daughter or perhaps given Bernie's age his granddaughter

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