Mercedes team boss Toto Wolff got in a lot of attention in recent weeks. The current corona crisis means that various car manufacturers and Formula 1 teams are struggling and are therefore often on the brink. Wolff immediately benefits and started buying shares en masse from Aston Martin and Williams.
The Mercedes team boss is doing a pretty good job: he bought 5% of the shares from the ailing Williams and he is a shareholder in car maker Aston Martin with a value of 1% of all shares. He is also a major shareholder in the Mercedes team, where he owns 30% of the shares.
As of next season, it means that Wolff is a shareholder in three out of ten teams. You might wonder if it is a responsible move by the German, not to mention the ethical aspect attached to it. Because is it morally responsible to have a share in several teams within the same sport, does this not hinder the competition?
We ask Martijn van de Hel, a lawyer specialized in competition law. “The most important question to ask is whether he has any say. That also depends on the type of share someone has within such a company. But if Wolff has decisive influence over both Williams and Aston Martin policies, it could of course lead to restriction of competition. ”
Not unique but certainly not common
In the first place, it is not unique to have shares in multiple teams within one sport. For example, Red Bull has several teams that play football in Europe, in the form of RB Salzburg and RB Leipzig. The City Football Group, which owns football teams such as Manchester City FC, Melbourne City FC and New York City FC, also has several football teams in different countries in its portfolio. The latter concerns clubs on different continents.
It is not unique within Formula 1 either, as Red Bull has two sister teams in the form of Red Bull Racing and AlphaTauri. Still, Wolff’s construction is odd, having never had a single legal entity share three independent teams.
The question is whether it is ethical. When we ask Van De Hel it is not so black and white. ‘It is of course a very special situation to begin with. I can’t think of a sport where there are shareholders who control multiple teams within one sport. Formula 1 in particular is of course a very concentrated market, if you own multiple teams you can question it. ”
Possible restriction of competition
‘In the worst case, it could be a construction in which Wolff is a’ linking pin ‘between the three teams, a kind of conduit in which information is always shared between the three teams. This gives rise to restrictions on competition and even cartels. But given that there are three teams that all perform differently, I don’t really believe that. Perhaps his influence will make Williams and Aston Marin better. That would be good for the competition. “
Still, it remains to guess what exactly Wolff wants with the shares in Aston Martin and Williams. ‘It can of course also just be a purely financial incentive. As an entrepreneur you always look further at possible profit. Maybe he sees potential in both teams and saw his chance to make a profit. The reasons behind it remain unclear. “
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