JULY 17, 2000
The machinations around Prost
THE plot thickens at Prost Grand Prix with the team's future becoming more and more like a bad soap opera. While Peugeo has been trying to buy the team with a deal involving the Vivendi company, Alain Prost appears to be working in direct opposition to his current engine supplier. On July 13, the day before France's biggest national holiday, there was a low-key announcement that Prost had formed a marketing partnership with a Hamburg-based sports marketing company called UFA╩Sports. Our sources suggest that the deal includes an option for the company to acquire shares in the team. At the same time there have been rumors for some days that Alain is negotiating to sell the team to a Canadian investment company. Representatives of the company were at the recent French Grand Prix and paid a visit to the Prost factory in Paris in the week before Austria. Our sources suggest that an audit is now being carried out on the team.
There is no indication at the moment as to who this may be but it is possible that it is the Onex Corporation from Toronto. Onex is a vast venture capital company which has investments in a variety of business sectors, notably electronic manufacturing and╩telecommunications (Onex is in partnership with Telefonica in Gramercy Communications which is investing $1.5bn in global telecommunications). In addition the company controls a movie production company and Sky Chefs, the world's largest in-flight catering firm and is Tony Johnson's partner in Hidden Creek Industries, the automotive company which has been talking to a variety of F1 teams in recent months.
The deal between Prost and Hamburg-based UFA Sports appears to be a simple marketing agreement. UFA Sports was established in 1988 to develop a marketing business in soccer. It is a subsidiary of the Luxembourg-based media company CLT-UFA. This group recently merged its TV interests with Pearson Television to create a major new force in European television with 22 TV channels, 18 radio stations and 17,000 hours of programming.
CLT-UFA is co-owned by the giant German media company Bertelsmann and a Belgian company called Groupe╩Brussels╩Lambert (GBL). Bertelsmann is in direct competition with Vivendi in the fast-developing electronic communications business although both are lagging behind market leader AOL Time Warner. GBL is a major shareholder in Prost's oil company sponsor TotalFinaElf (which helps to fund the Peugeot engine deal) and Vivendi's rival water company Suez╩Lyonnaise╩des Eaux, which is itself moving into the electronic communication business, bidding for mobile phone licences in France in league with Spain's Telefonica.
None of the machinations answer the question as to which engine the Prost team will be using next year. Peugeot wants to continue in F1 but without Prost. If it cannot get control of the Prost team the most likely course of action will be to do a deal with Arrows but there are complications as Arrows is funded by France Telecom, the owner of Arrows sponsor Orange. It is hard to see how this could integrate with a Peugeot-Vivendi operation.
Our sources suggest that Prost is trying to convince Renault that it should supply him with its engines next year but Renault is not keen as it would rather concentrate on its own plans to takeover Benetton in 2002. Prost's connections with French╩President╩Jacques Chirac may help his cause with Renault but any deal will be a grudging one. Alain's other possible engine supplier is Mugen but the best brains from that engine program are now back with Honda.
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