I have been trawling through the endless pages and pages of the SEC filings related to the Formula 1 takeover by Liberty Media. There is plenty of interesting stuff in there, much if which we know but has never before been made public. It will take a while to assess it all. However, one very interesting point was the following paragraph.
“In 1999, Her Majesty’s Revenue and Customs in the U.K. commenced investigations into the tax affairs of Mr. Ecclestone and his then wife, which were concluded in 2008 by a settlement agreement,” it says. “In 2012, Mr. Ecclestone was notified by HMRC that it was opening an investigation into his tax affairs. In December 2014, HMRC purported to repudiate the settlement agreement reached with Mr. and Mrs. Ecclestone in 2008 on grounds of fraudulent misrepresentation, which Mr. Ecclestone denies, and HMRC levied on Mr. Ecclestone tax assessments totaling approximately £1 billion, most of which Mr. Ecclestone disputes and which remains unpaid (with the agreement of HMRC) pending the outcome of the litigation Mr. Ecclestone has brought against HMRC in the High Court in London to challenge its repudiation of the 2008 settlement. HMRC’s investigation of Mr. Ecclestone’s tax affairs is ongoing.”
It is also worth noting that, as expected, the Formula One group does not the property from which it operates.
“Formula 1 owns no material property,” it says. “Delta Topco is based in Jersey. In addition, as of the date hereof, Formula 1 leases spaces for its offices in London, England and for its television production and technical operations in Kent, England.”
It also reveals that under the current agreements with the teams, the consent of a majority “of certain teams” is required if there are more than 20 Events in a season or more than 17 Events are held in a season and the number of Events that are held outside Europe, the US or Canada exceeds 60 percent or more of the total number of Events in that season”. This was previously thought to be 50 percent. These agreements also grant the corporate parent of McLaren and Mercedes (McLaren Group Limited and Daimler AG, respectively) the right to appoint a director to the board of the F1 company. “Ferrari has an equivalent right, pursuant to a provision contained in all Team Agreements granting that right to the longest standing Team that has competed in the World Championship for the greatest number of seasons since 1950.”
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joeblogsf1 
Joe,
Just a comment to say thanks for all hard work you do to keep us informed on stories big and small. I’ve been reading your blog for years, have read your books, and was happy to see your work start to appear in Autoweek. Keep up the great reporting!
I am very happy with to be working with Autoweek as well. It is a great magazine and important for F1 in America.
Agreed…Autoweek is an institution in the enthusiast community here in the US and real asset to the media world. However, now that is published every two weeks, I keep wondering whether they should rename it “Autobiweek.”
I dropped it when it went bi-weekly.
Take it up again…
We had The Women’s Weekly in Australia. When it became a monthly they chose not to change the name with it…
A great publication. I used to know the delightful editor, Deborah Thomas, and found the whole monthly/weekly thing a bit odd!
To be fair, Women’s Monthly has unwelcome connotations 😉
I’m sure Liberty read all the material and thought what a murky world F1 is behind the scenes. Hence their changes at the top; the hope is that they will be a lot more transparent and fair than the past.
They didn’t read it, they wrote it…
It’s so refreshing that Liberty are publishing all this information!
They have to.
What a sad end…….we all knew where his heart was, F1/motorsport and latterly money. Bernie you totally disrespected the fans and followers of F1 .Common people pay tax and now you are the same so pay what you should have paid years ago
Fascinating stuff.
Since Liberty Media has announced that it is going to be renamed “F1 Group” shortly, has anyone else here been tempted to buy a share or two, just because you can? (I assume one would automatically get sent the annual reports etc. which will be interesting)
They appear to have three stock classes. If so, is it better to buy a share the A, B or C (K), stock (or are there some restrictions based on different classes)?
The ins and outs of the stock market isn’t my strong point – growing up I was always much more interested in Gordon Murray than Gordon Gecko…
I’m not rich enough
Joe was this not Fascinating Fact 51?
No idea
The “A” class shares buy voting rights , allowed to vote on the F1 takeover. the “K” shares are just a tracking stock with the only reward is the stock price going up. I bought a small position in the K shares (now called FWONK) after the initial announcement and so far so good. Liberty is a quality, well run company that wants to grow their investment . As far as free to air TV, Liberty is usually #2 in cable (pay) TV along with broadband in Western Europe so F1 is looked at as content for their cable TV outfits but streaming works on their broadband too.
Hi Joe,
Are there secrets to how f1 was run that might become public now it has been sold? Anything in particular that you would like to know?
No, most of it I know, but this is public confirmation
Sounds fascinating, thanks for providing the analysis for us Joe.
If these documents are now in the public domain, is there anyway you could provide a link for us to read them ourselves?
Thanks
SEC Liberty Media Prospectus
Click to access filing.pdf
Kindly scroll down to p. 189 for matters related to Bernard’s tax affair 🙂
Holy Bank Balance, Batman!
I guess Bernie still has plenty of challenges to occupy his time!
I was concerned that after retirement the poor old blighter would waste away to nothing
…a BILLION pounds…?!! Yikes!
Crooked as a dogs back leg old Del Boy.
Perhaps if HMRC collects from him some of it could be earmarked for Silverstone…
Interesting that Red Bull isn’t invited to sit on the Board. They’ve been at it since 2004…MB since only 2010 (if you discount supplying engines since ’95 and all that activity in the 50’s–which MB at one time wanted to brush under the rug).
Is the definition of “certain teams” known?
Joe,
For a few of us with more than enough grey hairs, looking back to 1999 and the “Bernie Bond” of $1.4 Billion, which was managed by Robin Saunders at WestDeutsche Landesbank- I am sure some people will remember her, anyway the ones that got copies of the Bond details, we couldn’t say anything – due to legal reasons, but these tax and income problems were also back then he had. Once in a while things would leak out and the general press – media would report this or that, but now that F1 is floated in America, then everything has to come out, so I would expect a few more bits to appear about Bernie…
Bernie might find this a bit worrying. From the BBC about an hour ago.
“…The taxman’s failure to get tough with the super-rich risks undermining confidence in the whole system, MPs warned in a report on Friday.
HM Revenue and Customs must avoid the impression it has “one rule for the rich and another for everyone else,” the Public Accounts Committee said….”
Saw Chase handling some questions on conflict of interest and legality of the take-over. Though he didn’t handle it at all well, needs urgent coaching…..
On that same subject your favourite Bernard mouthpiece was rattling on too, based on ‘years of studies of F1 business’. Couldn’t help but feel he was simply mouthing the latest droppings from Del Boy’s table.
According to that particular monkey, the whole F1 operation was definitely going to be floated in Singapore for around $10 Billion a couple of years ago. – Any naysayers were fools.
Shows how much you can trust anything he says. I guess he’ll have more time to spend on Disney junkets from now on.
He’ll like “It’s a small world”… Lots of puppets
in the “City” a billion pounds is referred to as a “Bernie”, and I recall (perhaps erroneously) Bernie was worth 4 of em. If he accumulated such a huge pile, then to lose 25% of it (i.e. a single Bernie) seems better than what most of us poor joes (excuse the pun Joe ) have to put up !!
A Bernie used to be a million for a time in the 1990s, not a billion
I used to work in the Uk NHS and i can confirm that in finance departments a million pounds was indeed known as a Bernie.
A not so secret donation to New Labour.
Which was paid back…
It would not have been if there had not been a scandal
I bet the rent is not cheap on the TV production facility in Biggin Hill etc!
Several British companies have been taken over by America giants with promises that nothing will change, only for production t cease in the uk and longstanding names to disappear. In this case however I suggest that is exactly what needs to happen, FOM should be dissolved and new contracts drawn direct with Delta or FWON to allow a new structure to be built.
It is very obvious that the shrinking audience has badly damaged the value of the teams as promotional vehicles, Bernie had it tied up so that it did not matter if anybody watched a single race, the income was assured and in the bank first. This ensured that half the grid struggled for money, the circuits struggled for money and often spent the rest of the year paying for the GP weekend.
When we got to the stage of FOM nicking sponsors from teams that was really a sign that Bernie would not stop until every last penny had been wrung and the goose was dead.
The new commercial rights lease holders (Will people please stop calling them F1’s owners) seem to be talking of many changes that involve altering the regulations, yet we have heard nothing of any agreement re the F1SG or a return to proper working parties.
find it somewhat ironic that Ross is seeking methods of preventing top teams developing faster by using more money. We have just abolished that very regulation to enable teams to develop engines faster in season. The development points system worked, it frustrated some who sat on piles of unspent money but it did the job,where cost caps if introduced, will have forensic accountants tied in knots for years after every season.
The regulations too need rewriting so as to prevent effects or results, with the team to prove the negative and track/car camera evidence to be used in addition to static tests. (thus wings which pass the load test but the whole world can see bending on the track, would be banned, white background boards at fixed camera locations can easily measure the under-car profile, a laser even)
Interesting times.
Dont get me started on what the anericans did to Cadburys Creme Eggs and Fruit & Nut !
Bernie owns Biggin Hill
Parts of it
Bernie owns FOM’s offices at Princes Gate as well, doesn’t he? One imagines a fairly swift housemoving is in the cards.
I guess it’s convenient for the TV production base to be in the same place as airport the actual filming equipment is dispatched from, but there’s no need for that to be Biggin Hill, particularly.
Bernie owns half of west London
Joe,
You are correct. We had Eddie Irvine as a VIP Guest at our Corp event, a few years after he retired. He was well known in the Financial markets for his property portfolio. So the question was asked who got him started in property and he replied super quick – Bernie.
He then went to tell us about deals that Bernie had done – as to how much of it was true, someone in our legal dept did some digging and came back a few days later, and said that comment that Irvine made about Bernie is true
I just spotted the reference to the unlikely breakaway series on another blog. I wasn’t surprised to see it there, and that it wasn’t given much in the way of proper analysis.