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Comment: CVC no longer in pole position?

With the 2009 Formula One season about to open next weekend, CVC Capital Partners, the owner of the commercial rights to the championship, must be hoping that it will escape further collateral damage from the economic environment.

The highest class of motor sport is already struggling following the announcement by big financial services companies including Royal Bank of Scotland and ING that they would end F1 sponsorship once current contracts come to an end.

Last year Honda announced that it was pulling out of the championship, although its operation has been taken over by team principal Ross Brawn and will compete in F1 this season with financial support from the Japanese manufacturer.

Interestingly, the new car from the renamed Brawn GP team looks rather fast, which could prove a breath of fresh air for the sport after years of domination by Ferrari, Mercedes-backed McLaren and Renault. That might help boost sagging income from ticket sales as recession-hit motor racing fans stay at home to watch on TV a sport almost as expensive to follow in person as it is to compete in.

But the future still looks tough for CVC, which acquired most of Formula One Management, the commercial rights holders, in 2006 in partnership with the sport's ringmaster, Bernie Ecclestone, who over the past decade has managed to turn his once sole ownership of the business into a multi-billion-dollar fortune.

Squeezed profits is making it harder for CVC to service the debts it piled on the business to finance the USD1.7bn acquisition as well as the USD350m it subsequently paid for F1's trackside advertising and corporate hospitality business. Analysts forecast that the sport's revenues could fall by as much as 20 per cent this year.

Last year CVC dismissed reports that it was looking to sell off the sport or to replace Ecclestone, the group's 78-year-old chief executive. This year the answer might be different. One way or another, most F1 insiders would probably bet on Ecclestone outlasting the private equity firm's ownership, but investors with CVC might not be so sanguine.

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