MARCH 9, 2001
Kirch tightens his grip on EM.TV
LEO KIRCH, the man who is on the verge of taking commercial control of Formula 1, has tightened his grip on Thomas Haffa's EM.TV operation with the appointment of Kirch New Media chief executive Rainer Huether to the EM.TV management board. Only two of EM.TV's original board of directors: chief executive Thomas Haffa and the company's head of production, Sylvia Roth-Blum are now left on the board. Haffa has also given Kirch first option to buy his 43% share of EM.TV. Kirch has a 25% share of the voting rights in EM.TV and owns 16.7% of the company. He has also taken over Haffa's 50% of SLEC while guaranteeing Haffa's $1bn purchase of another 25% from Bernie Ecclestone's Bambino Trust. If Kirch can get the money together he will in effect control the commercial rights to F1.
This has not been greeted with any enthusiasm by the car companies involved in the sport who have made it quite clear to Kirch that they will oppose his takeover of SLEC - if it happens. There has been talk of an alternative World Championship but it is unlikely to come to that. The current Concorde Agreement runs only until the end of 2006 after which the F1 teams can do as they please. In order for them to agree to be part of a new agreement Kirch is going to have to offer them a considerable increase in the share of the income generated.
Kirch says that Bernie Ecclestone has no right to veto the deal between Kirch and Haffa but there is no doubt that the FIA does have the right to cancel the current agreement if it chooses to do so. Haffa is particularly vulnerable as he is facing legal action and investigations into EM.TV share trading last autumn. The Deutsche Schutzvereinigung fuer Wertpapierbesitz, an organisation which protects shareholders, says it has received 800 complaints against EM.TV.
The stock market remains unconvinced by the deal agreed with the EM.TV share price remaining at around 7 Euros.
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