AUGUST 31, 2001
Now what with Kirch?
THE news that Leo Kirch has decided not to go through with its deal to take over EM.TV throws the future of Formula 1 into a great deal of confusion. However, it is unlikely that any announcement would have been made without something having been sorted out over the future of the SLEC shareholding which the two German companies hold. SLEC is the holding company of the Formula One group of companies which control the commercial rights to Formula 1 racing.
Our sources say that in all probability a buyer exists for the shares which were owned by Kirch and EM.TV and that a deal is probably going to be announced in the not too distant future.
But who will that be? The suspicion is that Bernie Ecclestone may have organized a deal to buy the shares back from the Germans (at a profit, naturally) but it may be that Bernie will once again have done a deal with an investment company such as Hellman Friedman in San Francisco. The long term aim will remain to float the business on the stock exchange so that everyone involved makes more money. The other possibility is that the car manufacturers could be buying a slice of the business. This is hard to believe as the automobile trade is facing a slowdown at the moment and the amount of money being thrown around is reducing with each passing month.
The upshot of all this on a day to day basis is that the plans to renegotiate the Concorde Agreement will to be put on hold until the F1 teams know exactly who they are dealing with. A settlement is needed between all those involved but as the existing arrangement runs until 2007 there is no big rush for those making the big profits (whoever owns the SLEC shares) to upset the current status quo. The threat of the manufacturers holding their own series is still lurking but with the economic slowdown it is becoming less and less likely that the chief executives will have the money (or the time) to get into a rival F1 championship.
At the same time there are still some details to be sorted out between Formula 1 and the European Commission and until that is all finished there can be no flotation and therefore there is no real need for the Concorde Agreement to be renegotiated.
In other words, the sport is going to go bumbling on for quite a while longer without much changing...
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