NOVEMBER 23, 1998
Where did all the money go?
ACCORDING to an investigation carried out by the British TV program Panorama and The Financial Times newspaper, the FIA could be a great deal richer than it is today if its President Jean-Marie Balestre had been a better businessman. Working on information leaked by a Formula 1 team, the researchers revealed that in 1987 the second Concorde Agreement guaranteed the FIA 30% of F1's TV revenues. At the time this amounted to less than $1m a year. When it came to renegotiating the deal for the 1992-1997 Concorde Agreement Balestre decided that he would sell the FIA's 30% share to an Irish company called Allsop Parker and Marsh for a payment of $5.6m in 1992, rising to $9m in 1996. Allsop Parker and March was owned by Ecclestone's friend Paddy McNally and while the FIA received a total of $37m from McNally between 1992 and 1996, he received $65m from the TV income - a profit of $28m.
The new FIA President Max Mosley decided to exclude McNally from the 1997-2001 Concorde Agreement but agreed to an annual payment from the FIA of only $9m. A 30% share would have netted the FIA around $67m a year. Under questioning Mosley said that this was done because he wanted the FIA to be given a 10% share of FOH - worth as much as $300m - when Ecclestone's company was floated.
The reality is that the FIA probably had more money than it knew what to do with and needed to keep profits low in order to avoid problems with the French tax authorities, which had previously challenged the FIA's non-profit status. While this no doubt made Ecclestone a very happy man, Mosley could face embarrassing questions about the dealings when the FIA General Assembly meets in December.
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