APRIL 24, 2001
Max Mosley gets his $360m. Now what?
THE confirmation that the FIA and SLEC have agreed a deal which will see the promotional rights to the Formula 1 World Championship leased to SLEC for 100 years means two things: the FIA will soon announce the establishment of its planned FIA Foundation and the action will now switch over to a settlement between SLEC and the Formula 1 teams. It is all very well there being an agreement for 100-years with the FIA but without any racing teams involved SLEC is going to struggle to make money out of F1.
The next step is meetings between SLEC and the team bosses. These are expected to take place next week in Munich. At the same time there are stories in Germany that Kirch is close to doing some kind of a deal with the Association des Constructeurs Europeens d'Automobiles (ACEA), the European federation of car manufacturers, to sell a percentage of SLEC to that organization. Kirch is reportedly happy to part with 25% of the shares but wishes to retain control of the business. Bernie Ecclestone may also part with some of his shares (we hear that the figure of eight percent is being discussed) so that the car companies will end up owning 33% of the firm. At the current valuation of SLEC this should be worth $1.33bn although the car manufacturers would probably want to pay less.
This will have no effect at all on the organization of the sport as we understand that Bernie Ecclestone has a deal to stay on as chief executive of SLEC until at least March 2006. The car manufacturers will probably be given some form of right to veto decisions being made.
It remains to be seen how the teams which are not involved in motor manufacturers will benefit from this arrangement. Originally there was a complicated plan for organizations at different levels to have rights to buy shares in SLEC but it remains to be seen if this will occur.
The $360m deal with the FIA will, in effect, end the governing body's involvement in Formula 1 in all commercial respects. The FIA will continue to administer the series and will supply stewards and judges in cases where there is a dispute. The FIA will also supply the structure in which rules will be formulated and safety levels maintained. The FIA Foundation will, however, be aiming to work in other areas of the automotive world with the onus being on research and development into safety, education and ways of lessening the effect of the automobile on the environment.
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