Trawling…

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.”