“The rumors started on Tuesday when Joe Saward, a longtime and well-respected Formula One reporter, said that he was hearing ‘whispers’ that Formula One is currently undergoing an ‘intensive due diligence’ process that could ultimately lead to a sale,” Don Reisinger writes for Fortune. “Another ‘whisper,’ he said, was that Apple has become the ‘latest bidder’ for Formula One.”
“At first blush, Apple buying a car business sounds rather absurd,” Reisinger writes. “However, the report shouldn’t be ignored. Saward is one of the foremost reporters in the Formula One market and it’s well-known that Apple has at least taken a liking to cars. It also has the cash to acquire a company that’s been up for sale for the last year, and Saward himself has thought it odd that Formula One won’t just deny the reports.”
“He pointed to three key components that could make the deal make sense. For one, Apple is working on a car—something Tesla founder Elon Musk has called the “worst-kept secret” in Silicon Valley—and Apple might want to connect its name to a well-known and highly respected auto brand. What’s more, he says, Apple has more than enough cash to buy what could be a company worth somewhere around $8 billion,” Reisinger writes. “Finally, he believes the purchase could help sales of the Apple TV… Apple owning the franchise and offering it as part of a television package that would run on its Apple TV could make some sense and, like Saward says, help Apple TV sales.”
Read more in the full article here.
MacDailyNews Take: What did we write way back in May 2014? Oh yeah:
Perhaps Cook should consider bidding for and winning NFL Sunday Ticket away from Direct TV, buying rights to Premiere League and La Liga games, etc. and making them Apple TV exclusives. Go directly to the sports leagues with boatlods of cash. Maybe that’ll grease the wheels [with reticent content providers]. It’ll certainly move a bunch of Apple TV boxes around the world in short order.
[Thanks to MacDailyNews Readers “Fred Mertz” and “BD” for the heads up.]
Hey, forget this stupid idea. Feels like another Tim thought. Increase the DIVIDEND! 80% is the right number!
I respectfully disagree. At first blush it seems silly, but think about it.
(1) If I’m not mistaken, Formula One is owned by a private equity firm in Luxembourg. This allows Apple to invest European Union funds without repatriating funds and subjecting its holdings to US taxation.
(2) Formula One is a desirable commodity for Apple TV. It’s very popular worldwide.
(3) I suspect that there are some hard-core, enthusiastic automobile engineering experts working for Formula One. It must be very difficult for Apple to acquire this kind of employee—Apple-type people—in the auto industry, which is moribund and hidebound. Cultural fit is one of the most critical criteria for Apple M&A.
(4) Formula One is an aspirational brand. This is like when VW bought Rolls Royce. It didn’t make sense from a product-line point of view, but as a branding upgrade (as well as acquisition of high-end marketing talent), it totally makes sense.
Thoughts?
While I very much agree with most of what you’re saying, I would point out that point 3 is a little misguided. The Formula One organisation is the controlling body. The cars themselves are built be teams which are quite separate.
The engineering and technical expertise comes from the manufacturers, not the Formula One organisation, but of course the Formula One organisation does employ experts in order to organise the sport and create the rules that it operates within.
Having said that, Apple and Formula One would make an excellent combination, with benefits to both.
Dumb dumb idea.
Shareholders should object
Go Apple inc.!! let’s have all televised Formula One races around the world free streamed to Apple TV.
Great move for this global sport; mind you, not so sure what Mercedes and other manufacturers would think about this (Ferrari would be okay as they have Eddie Cue as a board member and he must be keeping them informed).
Apple Product logos could then adorn every car, the tracks etc…
Used to watch F1 but it’s so boring nowadays it’s just not worth watching.
Although Formula One is not very well known in the US, it has a vast international audience and is therefore an ideal event for Apple to own. There are very few sporting events that command such an international audience for twenty one events per year. It’s not just televised during the race, but also the preceding two days of practicing and qualifying.
At the moment, the content available for Apple TV is overwhelmingly aimed at a US market and is of much less interest to those living elsewhere. If Apple offered something like Formula One, they would create a compelling reason for people outside of the US to buy Apple TV.
Personally I’m not a fan of Formula One, but I know how popular it is and how devoted the fans are all around the world. It could be a great business for Apple to get into.
Based in the UK AAPL can use foreign funds to buy this. Yes it would be a great sporting event for APPL to host. But more importantly, IMO, the acctual tech used in these cars is extraordinary. I believe if this does happen that it would be the main reason for this purchase to occur.
I agree that it’s an excellent fit with Apple in many ways. The biggest drawback might be a conflict between Apple’s energy efficiency measures and Formula One’s massive waste of energy and resources, although the cars themselves try to use fuel as efficiently as possible.
Yes it’s the cars and the tech that are the main object of this possible acquisition. I think it’s a great fit.
https://en.m.wikipedia.org/wiki/Formula_One_car
The cars are built by the racing teams. The Formula One organisation is the controlling body and does not build cars itself, but does of course create the detailed rules that those manufacturers must work within.
haven’t we seen this corporate movie before? its called diversification the big idea in the 60’s 70’s and 80’s. it’s where cash flush corporations start buying up businesses in which they have little or no expertise, to broaden their portfolio – and make even more money – they thought.
didn’t work out all that well. then came the wave of consolidation where they started selling off these bad and money losing investments.
this is not a good idea.
This doesn’t make sense as the F1 broadcast rights are contracted out for many years. I know that NBC just renewed their contract for the US and Sky sports, which shares broadcast with the BBC in the UK, is taking over exclusively in 2019.
Buy ABC from Disney. You get ABC, ABC TV Production Studios + multiple other sports channels, etc, etc…
Buy HBO + Netflix… AppleTV wins.
Buy Sony. Get huge music + musicians library, Sony Movie + TV Production.
Buy Sony. Get sh**ty Japanese management
Buy Sony. Fire shitty Japanese management.
But Siri doesn’t even have Formula 1 score updates. Not going to happen.
Also Apple would not get the F1 car technology. That is owned by the individual teams. For example Ferrari owns their technologies and builds their own engines which are completely different than the technology that Mercedes uses in their engines and chassis.
I wouldn’t rely on Siri’s knowledge as an indicator of investment opportunities for Apple.
I recently asked “Hey Siri … are Beat’s headphones any good?” and the reply came back “Interesting question Alan”.
Formula One is BIG oil, everything Formula One does is based around the ICE. Apple’s future is the exact opposite of this so if they do plan on taking over is will no doubt spell the end of F1 as we know it. I think the series is great and it has an amazing history but for the benefit of the big blue marble that we live on I think a new leader needs to make big changes. Apple might as well be the one but not the only one. Tesla and Elon were the first and untimely they may make the biggest changes.