CVC gets EU approval; must sell MotoGP

CVC announced last November that it, along with Bernie Ecclestone's Bambino Holdings and German bank Bayerische Landesbank, had formed a new company Alpha Prema that will control F1's commercial rights.

But the EU Competition Directorate had to look into the deal to check that it did not give CVC too much influence and be against European competition law. Spanish promotions company Dorna, which is a subsidiary of CVC, owns the commercial rights to MotoGP and other bike racing championships.

After weeks of investigations, the commission felt that CVC having control of both F1 and MotoGP rights would not be good for competition within the EU, so has requested that CVC relinquish its interests in Dorna.

In a statement, the EU said: "The European Commission has cleared under the EU Merger Regulation the proposed acquisition by the private equity investment firm CVC of SLEC, the owner of the Formula One Group.

"The Commission's clearance is conditional upon the divestiture by CVC of its Spanish subsidiary Dorna, which is the promoter of the Moto GP motorcycle Championship. In light of these commitments, the Commission has concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it."

The EU feared that control of Formula One and MotoGP rights could reduce competition in the sale of television rights in Spain and Italy, where both championships are popular. There were also fears that the company could force those countries where MotoGP is less popular to buy the rights if they wanted F1.

EU Competition Commissioner Neelie Kroes said: "When the two most popular motor sport events in the EU, Formula One and Moto GP, come in the hands of one owner, there is a risk of price increases for the TV rights to these events and a reduction in consumer choice. I am satisfied that the commitments given by CVC will eliminate this risk."

The go-ahead by the EU for the CVC deal will be viewed as a landmark for the sport, because it should move it a step closer to heading off the threat of a manufacturer breakaway.

The Grand Prix Manufacturers' Association are hoping to do a deal with CVC that will help secure the future of F1.

McLaren boss Ron Dennis, who has played a central role in many of the discussions within the GPMA, claimed that the CVC green light was vital for the future - even though the sport's commercial package is only one part of the equation.

"I think everybody has agreed that they are of the view that it's all about money," he said at the Bahrain Grand Prix. "Money's all that's talked about in Grand Prix racing. Here, it is very important to understand that this is the future of Grand Prix Racing until at least 2012 and maybe beyond.

"The document which is a memorandum of understanding that is being worked on, at the moment really deals with many issues. I think the discussions that have taken place in the last month really are those that will determine where we push in manner of the long-term interest of F1.

"The buyout by the CVC has been most positively felt because they want stability and also in terms of how we participate in that growth. Now, it's much more of a common interest in terms of how that document is sustained in the long term, so now we are, I will say, more than a day less than a month away, but it will happen in that period of time."