Motor racing-CVC need Mercedes deal before any float - team exec

BARCELONA Thu May 10, 2012 8:09pm BST

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BARCELONA May 10 (Reuters) - Formula One's commercial rights holders CVC need to reach an agreement with Mercedes before any flotation of the sport can be successful, Mercedes GP chief executive Nick Fry said on Thursday.

The German car giant, with seven times world champion Michael Schumacher as one of their drivers, is the only leading team yet to commit formally to a long-term future in the sport after the existing 'Concorde Agreement' expires at the end of the year.

"If CVC wish to float F1, I think they need this resolved fairly quickly - possibly more than we need it resolved," Fry said at the Spanish Grand Prix, the fifth round of the championship and first in Europe.

Formula One is planning a flotation in Singapore that could value the business at as much as $10 billion and could take place by the end of June.

CVC Capital Partners owns 63.4 percent of the sport and plans to retain a stake.

Champions Red Bull, McLaren and glamour team Ferrari have all signed up to a new agreement that governs the commercial side of the sport, including the distribution of revenues to competitors.

Mercedes said earlier this week, in response to media speculation that they could leave Formula One, that "we are in discussions with the commercial rights holder and we would like to ask for your understanding that we are not currently commenting on these discussions."

STICKING POINT

One important sticking point for Mercedes is believed to be that their three big rivals have been offered places on the board of Formula One's eventually floated company while they have not.

McLaren have confirmed they have a place on the board while Ferrari have always had a special status as the only team to have competed in Formula One since the first world championship in 1950.

Mercedes only returned to Formula One with its own works team in 2010, after buying champions Brawn GP, after pulling out at the end of 1955.

Their victory in last month's Chinese Grand Prix was the first by a works Mercedes since 1955.

They have however enjoyed considerable success since they came back as an engine supplier in 1994, winning multiple titles with McLaren.

"Mercedes-Benz wishes to be in F1," said Fry, whose team had earlier announced a partnership with the U.S.-based Starwood Hotels and Resorts chain that indicated a longer-term vision for the future.

"I would add that F1 also needs Mercedes-Benz, it is one of the top 20 brands globally and is one of the few car manufacturers in F1, it is an engine supplier to three teams," said Fry.

"It can attract brands like Starwood Hotels, a huge American company that takes these decisions very seriously...

"I am completely convinced in my mind that if CVC wish to sell some or all of F1, the value they can derive from that would be severely diminished if Mercedes was not a participant."

Mercedes also supply McLaren and Force India with engines. (Reporting by Alan Baldwin, editing by Ken Ferris)