La Presse reports that Montreal race promoter Francois Dumontier is looking to cash in some of his chips by finding a financial partner. Translation by Google (tweaked by me).
June 1, 2015
Part of the Grand Prix for sale
Vincent Brousseau-Pouliot
La Presse
Part of the Canadian Grand Prix is for sale. Now that he has concluded a 10-year agreement with F1 for the presentation of the Grand Prix in Montreal, the promoter of the race Francois Dumontier has had discussions in recent months with certain companies in the province Québec as well as major US companies in the entertainment industry to accommodate new investors in his company, Octane Racing Group.
Several scenarios are considered, including the sale of a stake of up to 50% of the shares of Octane Racing Group, currently 100% owned by François Dumontier. Reportedly, at least two Quebec companies have held discussions with Octane Racing Group: Attraction Media and Stingray. The CH Group indicated to the Press that it has not had discussions about a partnership.
"I talked to several people, said François Dumontier in an interview with La Presse. I think right now we [the Octane Racing Group] have a value, and I am looking at my options as any businessman would. This is a normal process. "
"I'm one year into my new contract [10 years with F1]. As an entrepreneur, my current value is better now than it was last year or will be in five years. "
The Octane Racing Group has been the local promoter of the Canadian Grand Prix since 2010 under an agreement with Formula One Management, the company run by Bernie Ecclestone who owns the rights to the F1 Grand Prix worldwide.
Formula One Management has a separate agreement with the different levels of government, who pay $ 18.7 million per year for the presentation of the Grand Prix in Canada. The Octane Racing Group therefore organizes the race as local sponsor, does not touch subsidies and accepts some of the financial risk in accordance with its contract with Formula One Management. "It is I who take the risk," said François Dumontier, who, at 48, is the second youngest promoter in the circuit of F1.
Previous discussions
This is not the first time that François Dumontier has considered welcoming new shareholders in the company. Between 2011 and 2013, the Montreal businessman had discussions with US companies as part of the proposal for an F1 race in New Jersey. These US companies "have an interest in the Canadian Grand Prix," according to Dumontier. But the project in New Jersey fell through and Mr. Dumontier had to wait until June 2014 to renew its agreement as promoter of the Canadian Grand Prix for 10 years.
With its new 10-year agreement as a local promoter of the Canadian Grand Prix, François Dumontier has revived discussions with these large US companies in the entertainment industry to accommodate new investors in the Octane Group. He also initiated discussions with major Quebec companies.
"I have had approaches by foreign groups, said François Dumontier. In my evaluation, I pay attention to potential local partners but it could also end up with a foreign partner. "
"I am a Montrealer, I made my career on Île Notre-Dame in Montreal, the Grand Prix is an institution for Montreal and we will celebrate 50 years of the F1 in Montreal in 2017. I will explore a little the possibility of a Quebec investor before looking to foreign capital. "
Reportedly, at least two Quebec companies discussed with Octane Racing Group: Attraction Media and Stingray. Attraction Media is an entertainment group that is one of the largest TV producers in Quebec, in addition to having 10 regional radio stations and an advertising production company. Stingray is a Montreal-based music distributor in Canada and abroad. Both companies have not commented on this issue, and Dumontier did not specify the identity of his interlocutors, both in Quebec and abroad.
The CH group, a major player in the Quebec entertainment industry, however, confirmed to La Presse that it had no discussions with the Octane Racing Group. "We do not have any discussions for a partnership," said Donald Beauchamp, Senior Vice President, Communications Montreal Canadiens (CH Group). In 2013, Geoff Molson, shareholder and Chairman of CH Group, met the big boss of F1 Bernie Ecclestone, according to La Presse.
If he manages to get along with new shareholders, François Dumontier however intends to keep a significant stake in the Octane Racing Group and continue to be the main leader of the company.
Searching for a Sponsor
Another issue that may influence the entry of new shareholders in the Octane Racing Group: finding a title sponsor for the Grand Prix of Canada, which it has not had since 2003 (see following). Octane Racing Group estimates the value of this sponsorship to about $ 6 million per year (the annual budget of the Grand Prize is thirty million).
Is Octane Racing Group a profitable business? The company does not disclose its financial statements. "I have not had a major sponsor for five years and yet I renewed my promoter contract states François Dumontier. As a businessman, I am satisfied with our performance and I ready for the next 10 years. "
