Now they are serious

THIS week's announcement of the establishment of a company called GPWC to organize a new World Championship in 2008 does not look like posturing by the automobile manufacturer. The idea of a rival to Formula 1 now looks real although it is clear that the intention is not to have two competing series but rather what one team owner described as "a seamless transition" between Formula One and the new series.

The problem is one of money. The Kirch Group, which now owns 58.3% of the Formula One holding company SLEC but is negotiating to buy another 16.7% from EM.TV, has invested a great deal of money to buy the rights to the series and does not want to give away too much of its income. SLEC currently gets around 65% of the revenues generated by F1 while Allsport Management in Geneva takes another big chunk of money. The car manufacturers are believed to be offering Formula 1 teams something like 85% of the total revenues of the series. And Kirch cannot compete with that. Kirch and the teams are reportedly so far apart on money that it does not look like there can be a solution and at some point or other Kirch is going to have to wake up to the realization that it has a worthless asset if the Formula 1 teams decide to join the new series.

It is agreed that the World Championship will be seen by the public as the series in which Ferrari is racing. Ferrari is the heart and soul of the business and it is very clear that the Italian team is at the center of the new GPWC although the organizational push appears to be coming more from DaimlerChrysler. If Kirch tries to put up a fight, it is likely to come in the form of an attempt to buy up racing circuits. The trouble with this approach is that very few of the modern facilities are essential to the World Championship and Monaco (the one exception) cannot be bought. Monaco will go to whichever series it feels will best serve its aims - and that means that it will follow Ferrari.

Of the rest, there are none which cannot be replaced. Many teams have no desire at all to go to places like Magny-Cours and Austria and would happily fund (or at least encourage) other circuits to bid for races. France, as an example, has any number of tracks which could be upgraded or created and there might, perhaps, even be another attempt at getting a race nearer Paris.

The FIA is not really in a position to dictate anything apart from safety regulations and the GPWC plotters do not really see the need to try to establish a rival federation as there is plenty of time to field a candidate in FIA elections if that is the path they choose to take. The current FIA Deputy President for Sport is Marco Piccinini, a man with strong Ferrari links. He is ideally placed to take over from Max Mosley when his mandate expires in October 2005.

The only obvious way in which Kirch could offer the teams more (and thus make the most of the investment already made) would be to acquire Allsport Management. This would mean that Kirch could match the kind of money being offered by GPWC but it would need further immediate investment.

And Allsport would not come cheap...

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