JUNE 16, 1997
F1 flotation talks drag on...
THE negotiations over the flotation of Bernie Ecclestone's Formula One Holdings (FOH) have, as expected, resulted in plans for a completely new Concorde Agreement, getting rid of the troublesome 1997-2001 document which has split the F1 teams for the last year.
The F1 teams and Ecclestone are discussing a deal by which the teams will give up some of the TV revenue - under the 1997-2001 agreement teams are expected to gain around $10m a year - in exchange for more shares in the floated company. If all the teams were to receive a one percent shareholding (which is possible) it could be worth as much as $30m which allied to a smaller share of the TV revenue would make a much more attractive package for the teams.
Ecclestone is baulking at this as he wants to be sure that the package he is selling consists of the existing teams. He does not want the smaller teams to sign up for the shares and then sell them and quit F1. He is looking for personal and financial guarantees from team bosses that they intend to remain in the sport for a period of 10 years. Ecclestone's financial advisors are keen to strengthen the package before shares are offered to the financial institutions. The new agreement seems to include a 25-year deal with the FIA for FOH to manage the commercial affairs of Grand Prix racing - until the end of 2021 - in exchange for the FIA getting a 10% shareholding in FOH.
There is also debate going on as to what should be included in the FOH package in terms of the merchandising of F1. It looks likely that a deal will be hammered out which will see all the team merchandising coming under the same umbrella. As Ferrari currently has a long-term (seven year) deal with the German Bertelsmann empire it is likely that this would be the core of any marketing package.
Although team bosses are keen to extract the maximum from the negotiations they are also aware that they must be careful not to torpedo the entire flotation process as it is generally agreed that flotation is essential to solve the problem of who is going to succeed the 66-year-old Ecclestone when he chooses to quit the business.
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