JULY 14, 2000
Ecclestone's sale of the century
IT'S TRUE! Bernie Ecclestone has pulled off the deal of his life it emerged yesterday when it became clear that his F1 management group has extended its stranglehold on grand prix racing's commercial rights for another 100 years beyond their current expiry in 2001. "Those rights are worth billions over the long term," said one F1 team member who preferred to remain anonymous, "and we're concerned they've been sold to Bernie for nickels and dimes."
The general assembly of the FIA, motor racing's international governing body, voted overwhelmingly to extend those rights until December 31, 2111 in exchange for a payment of 211.76 million pounds - roughly one year's current annual income of Ecclestone's organization.
It is symptomatic of the wall of masonic silence which F1 teams traditionally erect around matters financial that few team principals were prepared to be quoted on the record on this deal which will see Ecclestone pay 35.3 million pounds immediately and the balance over the remainder of the 100 year term at 1.76 million pounds annually..
"Bernie bought some rights from the FIA and if it makes sense for both parties, then that's fine," said Flavio Briatore, managing director of the Benetton team and a close personal friend of Ecclestone. "I believe it is properly done."
The long-term implications for the teams' income is less clear. The 11 formula one entrants currently share 49 per cent of the income derived from television and other marketing rights under the terms of the Concorde agreement, a complex protocol which has governed the commercial and technical administration of grand prix racing since 1982.
However, it is unlikely that the new arrangement will have the unqualified support of McLaren and Williams, two of the sport's blue riband teams who have won more races between them over the past two decades than the rest of the competitors put together.
The negotiating clout of McLaren chairman Ron Dennis and Sir Frank Williams forced Ecclestone and the FIA to change the terms of the newly renegotiated Concorde agreement in 1997 when it became clear to these two team owners that Ecclestone was taking too large a slice of the commercial cake.
The current Concorde agreement expires in 2007 and it is clear that the teams will be looking for another pay hike from Ecclestone's kitty when it comes to negotiating fresh terms.
More immediately, however, the European Union competition commissioner Mario Monti must give the green light to this new formula one arrangement. He had previously complained that by having a stake in the income from the world championship, the FIA was in an unfairly monopolistic situation. Now the governing body is being seen to isolate itself from Ecclestone's commercial operation and thereby theoretically remove itself from further legal criticism.
In a separate development, the FIA - which is a non-profit making organization - is planning to move its headquarters back to Paris from Geneva. It moved to Switzerland just over a year ago after a row with the French government over its tax status. That has now apparently been resolved.
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