F1 is hoping to capitalise on it s Asian and Middle East fans, particularly given that it s advertising and corporate hospitality business is currently in the red.
Private equity firm CVC took control of Formula One in 2006. Last year s accounts show that CVC made an after-tax loss of $3 million (£1.5 million) in it s ads and hospitality division having paid $22.5 million (£45 million) on interest on loans of $334 million (£668 million) that were taken out to buy it s 70% stake from banks and Bernie Ecclestone.
The accounts include revenues earned from 11 of 18 Grand Prix held from June 1st onwards the date that the European Commission cleared the sale. CVC s net debt is $315 million and they are paying a fairly high rate of interest because of the inclusion of Piks (Payment in Kind) which allows interest and capital repayment to be delayed until the company is floated or sold.
Both CVC and Bernie Ecclestone are looking to shift Formula One s focus away from Europe towards Asian markets such as Malaysia and Singapore where companies are willing to pay good money for advertising and corporate entertainment during race weekends. With France and Canada yet to find a main sponsor for their Grands Prix this season, it is little wonder that heads are turning away from the more traditional F1 market towards Asia and the Middle East. The lack of sponsorship for the two Grands Prix has fuelled speculation that both may be axed from the 2008 calendar.