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GP Week : Issue 155
Formula One’s forthcoming IPO on the Singapore stock market has been big news since the idea was floated during the Malaysian Grand Prix weekend. But in the outside world, a much bigger story has been the Facebook initial public offering, which saw the value of shares plummet shortly after listing when it emerged that the banks under writing the flotation had reassessed the value of the stock shortly before it went on sale following a downwards revision to Facebook’s financial forecasts. Because the future value of Formula One depends heavily on the as-yet-unsigned Concorde Agreement, it is entirely possible that purchasers of F1 stock could find themselves in a very similar situation to Facebook’s investors should one or more of the teams elect to pull out. Another problem that could have a knock-on effect on the F1 share price is the number of grands prix that are at risk of falling off the calendar, either entering alternation deals or disappearing completely. The Nurburgring and the Circuit Spa-Francorchamps are two of F1’s most iconic brands in track terms, and both races are currently under threat. Should they fall victim to the ongoing financial crisis, the F1 brand will be devalued, and the share price with it. Ecclestone this week hinted that Formula One would delay the flotation believed to be scheduled for June while CVC assessed the state of the markets. “All that has ever been said is that [CVC’s Donald] Mackenzie said this would probably depend an awful lot on what the market is at the time and the market doesn't look too bright after that little bit of a problem with Facebook,” Ecclestone told CNN in the Monaco paddock. “I think [CVC] are going to wait and see.” FACEBOOK FALLOUT TO DELAY FORMULA ONE IPO? BRIEFLY » The Monaco Grand Prix is the highlight of Formula One’s social calendar, with more events and parties than you can shake a stick at. The challenge for the attending media is to flit from party to party, sampling enough canapés at each that there is no need to buy dinner in the expensive principality. The partying kicked off on Wednesday afternoon with a Casio event on the Red Bull floaterhome, followed by a book launch at Pirelli. Thursday saw Lotus celebrate 500 grands prix for teams based at Enstone and Mumm sponsor a book launch at the Hotel l’Hermitage. Then there were the legendary Red Bull and Force India parties, both of which went on late into the night – the last stragglers were seen leaving Vijay Mallya’s Indian Empress at 5am on Friday. The partying continued on F1’s rest day with a Renault Alpine car launch, a Lotus Originals store opening attended by HRH Prince Albert, and a champagne reception on the TAG Heuer yacht. For those not yet partied out, McLaren sponsors Hugo Boss had their own event on Friday evening. And that’s before you even think about late nights at Rascasse, Stars and Bars, and perennial F1 favourite the Amber Lounge... Pass the ibuprofen? » The Monaco paddock was as celeb-packed as always, and in such a crowded space it is impossible to swing a cat without hitting a face more familiar from the cover of a magazine. The highest-profile star of the weekend was Will Smith, who led a coterie of actors over from the Cannes film festival. Cuba Gooding Jr was wandering the paddock on Saturday, while Antonio Banderas, Michael Fassbender and Jennifer Lawrence could be found harbour- side on Sunday. Also from the film world was Ron Howard, director of the forthcoming Hunt- Lauda film Rush. The sporting world had its fair share of celebrities, from Sauber guest and Chelsea FC owner Roman Abramovich to the German national football team. Also present were Petra and Tamara Ecclestone, daughters of Bernie. Meanwhile, Bernie’s ex-wife Slavica attended the Indy 500 on Sunday. The battle between Tavo Hellmund, originator of the Austin Grand Prix project, and the Texan race’s current promoters has turned nasty amid allegations of fraud. Following a request from Austin’s American Statesman newspaper, court records in the suit between Hellmund and the Circuit of the Americas were this week unsealed by a Texan judge. And the paper work revealed a few items of interest. A careful reading of the records implies that Red McCombs – the billionaire businessman associated with the grand prix project – is little more than a figurehead, contrary to popular belief. McCombs originally held a 57 percent stake in Accelerator Holdings, parent company of the Austin Grand Prix project, but statements from McCombs’ lawyers argued that as the 87-year-old was neither an officer nor a director of McCombs Motor Sports LLC, and that he was not actively involved in negotiations surrounding the F1 project. “These are two major documents that are foundations to this project,” Hellmund's lawyer Austin Tighe told the American Statesman. “We have [McCombs] being the financial face in press conferences and roof toppings, but based on what was presented today, he has very little, if any, involvement in this project.” Following the unsealing of the documents there was a war of words between the lawyers for both parties. “We believe the tactics Mr. Hellmund and his legal team have employed to date are meant to purposely generate negative public sentiment about Circuit of the Americas in hopes of extracting a large settlement,” said COTA attorney Michael Whellan. In response, Hellmund’s legal team alleged that they had evidence of fraud in the Austin Grand Prix project. “If Bobby Epstein truly desires an efficient resolution of his dispute with Tavo Hellmund, as he now claims, he can simply honor the $18 million buyout agreement that he signed in September of 2011,” Eric Wetzl said. “If not, Tavo is prepared to amend his pleadings to include charges of fraud and other misdeeds, based on newly discovered evidence. We believe this evidence demonstrates that Mr. Epstein intended to force Tavo out of the F1 project from the beginning.” AUSTIN GP BATTLES ON AMIDST FRAUD ALLEGATIONS 7 GPWEEK.com // PARTNERS: F1 >>> NEWS