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Old 18 Jun 2020, 18:45 (Ref:3982691)   #51
Richard C
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Serious question. What does buying equity in an F1 team get you. For those who are trying to place a relative into the car, I get that. But otherwise, why do it? Especially if it is a minority share.

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Old 18 Jun 2020, 19:51 (Ref:3982705)   #52
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If you add the amount of money spent by both Williams and Mclaren in the last few years it must be a truly eye watering amount and neither of them have achieved anything whatsoever, seems absurd and obscene
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Old 18 Jun 2020, 23:05 (Ref:3982729)   #53
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Serious question. What does buying equity in an F1 team get you. For those who are trying to place a relative into the car, I get that. But otherwise, why do it? Especially if it is a minority share.

Richard
Toto & Lauda have made it work but on the surface it doesn't seem to make sense. I still have a gut feeling that Zak Brown would attempt to do a management buy out if things go totally pear shaped. McLaren as a group have borrowed money at ludicrous interest rates according to some media commentary so the pain has yet to really hot them and the end result is not if they go down but when. When money is borrowed at stupidly high interest rates then there is only one reason and that is desperation and it never ends well. I would not be surprised to see the end result of whatever is going to happen within a few months and possibly not that long. It might be to Mercedes advantage to help salvage the F1 team which sort of gels with a management buy out.
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Old 19 Jun 2020, 17:14 (Ref:3982811)   #54
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Serious question. What does buying equity in an F1 team get you. For those who are trying to place a relative into the car, I get that. But otherwise, why do it? Especially if it is a minority share.

Richard
I think most investors doing this are looking at adding value - they may bring business contacts/sponsors/other expertise, that add values to the team and then sell on . This was easier when there were plenty of buyers out there, but now as you say the returns are not there. Certainly they are not going to get rich on poor or no profits with little hope of large dividends.

Probably this fits the trend of investors looking for share price growth in business nowadays and then selling on. I believe that Uber, for example, in it's IPO on the NYSE a while back actually allegedly stated in the prospectus that is was unlikely to ever to make a profit.
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Old 19 Jun 2020, 22:00 (Ref:3982846)   #55
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F1 is just a giant spinning vortex that sucks limitless money into a bottomless black hole....other than that its a profitable investment opportunity for the super wealthy.
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Old 20 Jun 2020, 05:23 (Ref:3982861)   #56
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I don't believe it will be profitable. It's always been said - "if.you want to make a small fortune out of motor racing, start with a very big one."

It will implode at this rate, if two of the biggest news in the sport are falling apart. Maybe that would be the best thing, let the "Formula 1" brand go off on its glitzy, TV-orientated world with Ferrari, Red Bull and Mercedes while the garageistes can set up a racing series where the car is the star. It'll suit us grumpy old men down to the ground.

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Old 20 Jun 2020, 06:37 (Ref:3982874)   #57
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I concur
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Old 20 Jun 2020, 15:30 (Ref:3982943)   #58
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It will implode at this rate, if two of the biggest news in the sport are falling apart. Maybe that would be the best thing, let the "Formula 1" brand go off on its glitzy, TV-orientated world with Ferrari, Red Bull and Mercedes while the garageistes can set up a racing series where the car is the star. It'll suit us grumpy old men down to the ground.
The problem is that F1 has destroyed single seater racing such as the old F2 and F3 and replaced it with pointless, slot filling spec series.Even if there was a new, cheaper F1 there is nobody left to build the cars.

Mod: Fixed the quote.

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Old 20 Jun 2020, 21:51 (Ref:3982984)   #59
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It’s harder for F2 and F3 teams to find sponsorship, if F1 is king in terms of TV time and those two get a look in. Hence why F1 gets all the big sponsorship and has sucked all the money out of junior formulas IMHO. Hence why F2 and F3 have linkups with F1 teams
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Old 21 Jun 2020, 16:00 (Ref:3983078)   #60
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About to get messy..now in court.

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Old 21 Jun 2020, 16:13 (Ref:3983080)   #61
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Hmm, effectively there are no assets unless the creditors release them or the Security Agent is given court permission to sell. Complete circle jerk. Bye Bye McLaren...
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Old 21 Jun 2020, 17:10 (Ref:3983090)   #62
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Hmm, effectively there are no assets unless the creditors release them or the Security Agent is given court permission to sell. Complete circle jerk. Bye Bye McLaren...

Not according to the legal argument in the application put forward by McLaren's barristers; they claim that it amounts to between 20 and 25% of the group's total assets.

And a judge has granted an expedited hearing to take place; so round one to McLaren.
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Old 21 Jun 2020, 17:18 (Ref:3983091)   #63
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Yes I read that bit but nonetheless it looks like the assets are already accounted for. The argument surrounds the security agent's fiduciary duty.
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Old 22 Jun 2020, 08:41 (Ref:3983188)   #64
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At the moment it would appear that the judge's sole responsibility is to determine the credence of McLaren's argument that "Under the terms of the financial documents, the Defendant is obliged to release the Transaction Security in certain prescribed circumstances. Importantly, the finance documents expressly state that Company(McLaren)is responsible for certifying whether the prescribed circumstances exist, and that the Security Agent is entitled to rely upon any such certification.
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Old 22 Jun 2020, 08:55 (Ref:3983190)   #65
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Yes it's interesting which is why I suggested it's a circle jerk.
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Old 22 Jun 2020, 12:19 (Ref:3983207)   #66
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I didn't read the entire document. But it sounds like a bank is holding McLaren assets as collateral or is in charge of releasing those assets to be used for collateral for future deal. Other investors view those assets as already acting as collateral for debt they own. The other investors don't want the collateral to be diluted with others debtors being brought into the picture. The bank is caught between McLaren and threats from existing debtors. Question is... what is the details of the financial agreements with the other debtors? Has McLaren offered assets to more than one party as collateral?

Am I getting this right? This sounds serious. Why is is the F1 press not talking about this? I understand the issue here with respect to McLaren > Zak Brown > Motorsports Network, but there are others who report content like this that are not "tied" to McLaren.

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Old 22 Jun 2020, 12:23 (Ref:3983209)   #67
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It is pretty scary if the numbers are correct. We now have McLaren and Williams subject to predatory investors.
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Old 22 Jun 2020, 17:06 (Ref:3983256)   #68
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Richard, this is really about one group of creditors trying to get a leg up to become "preferential creditors" so that they can force McLaren to accept their terms for extra funding.

And it would appear that McLaren believe that they can raise the funds on better terms from elsewhere. Whether that's true or not, who knows; but I suspect that now that this has reached court, it might be mute?
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Old 22 Jun 2020, 19:12 (Ref:3983263)   #69
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Am I getting this right? This sounds serious. Why is is the F1 press not talking about this? I understand the issue here with respect to McLaren > Zak Brown > Motorsports Network, but there are others who report content like this that are not "tied" to McLaren.

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I suspect the rule of sub judice is in effect, that is why the media are not talking about it.
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Old 22 Jun 2020, 19:25 (Ref:3983264)   #70
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I suspect the rule of sub judice is in effect, that is why the media are not talking about it.

It's a civil matter being heard by a judge from the Chancellery Division, not a criminal case. And the judge has already published most of the salient details in his judgement allowing a speedy hearing to take place in early July.
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Old 22 Jun 2020, 19:29 (Ref:3983266)   #71
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It's a civil matter being heard by a judge from the Chancellery Division, not a criminal case. And the judge has already published most of the salient details in his judgement allowing a speedy hearing to take place in early July.
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Old 22 Jun 2020, 22:23 (Ref:3983284)   #72
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I can't speak to the particulars of UK law, but I assume any UK specific sub judice provisions only apply to UK based entities? I have been trying to find any other mention of this situation. I did find the link below which is a summary:

https://www.law360.com/transportatio...ough-uk-courts

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Old 23 Jun 2020, 08:59 (Ref:3983338)   #73
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It was mentioned on Radio Five Live today. Something along the lines of "McLaren have said they need emergency funding by the end of July to ensure their continued participation. They want to out up their factory and collection of historic cars as security."

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Old 23 Jun 2020, 09:38 (Ref:3983343)   #74
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By virtue of the fact that the judge published his initial findings, i.e. that there could be an expedited hearing on the matter, it becomes a public document. Therefore, as there were no reporting restrictions on the case, it would be entirely a matter for the media to decide whether they wished to cover the story.

There are no sub judice, or contempt of court, issues in reporting facts published by the judge.
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Old 23 Jun 2020, 11:36 (Ref:3983363)   #75
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The thing that interests me about McLaren and Williams situation is that both apparently need financing again in a short period, both have allegedly already commited their assets against other borrowing already. Fast forward and both have their investors, but what is the return?

Both McLaren and Williams are pinning their future fortunes on the budget cap of £145m. They will still have to beat the 'works' teams who will not 'unlearn' how to build an F1 car and will still attract the best sponsors and afford the best drivers. So you are in a scrap for 5th in the WCC in a battle that is going to be much closer than the one at the front - so you could easily still be quite competitive and only finish 6th or 8th with the FOM income that goes with it.

I imagine both teams will spend every penny of the £145m budget cap, which means Williams (for example) would need to spend more than they do now, which means neither are likely to deliver big (any?) profits. So, aside from putting your son in an F1 car, where is the upside (as they say these days) I can only see that it is getting assets on the cheap surely?
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