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Outlook: Formula One

Tuesday 17 November 1998 00:02 GMT
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BERNIE ECCLESTONE is undoubtedly an outstanding, if controversial entrepreneur. But in the financial markets he is becoming something of a joke. Formula One, the motor racing rights business Mr Ecclestone built up from scratch, has already been through a failed flotation. Now Mr Ecclestone is back, peddling a plan to raise $2bn by securitising the company's future television revenues.

No sooner has the investor roadshow started, however, than Mr Ecclestone finds himself turning into the pits again, accused of making misleading claims about an European Commission investigation into his company's stranglehold on Formula One television rights. His advisers insist everything is above board. Unfortunately, the prospectus for the bond issue remains a semi-secret document, available only to potential investors, so we don't know this to be the case.

No doubt some professional investors will dutifully read the numerous financial health warnings and then take the plunge anyway. The question is whether they will give Mr Ecclestone the price he wants. The deal when raising money from the financial markets is that you trade information for cash. As long as Mr Ecclestone's affairs remain so shrouded in secrecy, the City will continue to demand a quite a price for backing him.

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