MARCH 17, 2002
Formula 1 team bosses agree a structure for the future
THE Formula 1 team bosses spent 10 hours in meetings at Sepang of Thursday and Friday during which a number of issues were discussed in depth. Secrecy was very much the order of the day and all the team bosses said that the future of Kirch was not on the agenda. This is strange given the gravity of the situation in Germany and the feeling amongst observers was that the issue was discussed at length but that there was an agreement between the team owners that there would be no public comment made on the subject.
The options available are very limited as neither Bernie Ecclestone nor the automobile manufacturers seem to be very keen on paying the kind of money being asked by Kirch for the shares in SLEC. The German banks could take the business off Kirch and then work out a deal with the teams and manufacturers. This would reduce Kirch's debts and keep F1 stable. The problem is that the income currently being generated by SLEC is being used up to pay the teams and to pay off the Eurobond issue, leaving very little in the way of profit.
The other option for Kirch would be to convince the banks that the best way forward would be a flotation of SLEC. This might buy Kirch some time (as preparations would take time). The teams and manufacturers could be kept happy with agreements for each to have shares in the business. This is a nice idea but the recession means that flotations are very much out of fashion and there are no guarantees that a public offering would bring in the kind of money Kirch needs to keep the banks happy.
The meetings in Malaysia also considered the issue of the engine regulations for the future with a compromise being hammered out on Friday night with a phasing in of a reduction in the number of engines available each weekend. Our understanding is that next year teams can use as many engines as they like before Saturday midday, but must then use a maximum of two engines for qualifying and the race. The 2004 rules would see a reduction in the engines for the whole weekend. This will probably lead to the need to change the timetable as there would need to be time for teams to change engines between sessions and things would be seriously rushed if the current timings remain in place. We hear that practice on Saturdays could begin as early as 08.30.
Our understanding is that if a team suffered an engine failure in qualifying the driver would lose 10 grid positions but could then start the race with a new engine.
The details of the talks will be announced next week after a meeting of the F1 Commission in Paris on Tuesday - although it is possible that if unanimous agreement is reached between the teams in Malaysia this will not be necessary. There was a lot of pushing and shoving going on Saturday in Sepang to get everyone to sign a document and it is possible that this will be announced in the course of Sunday.
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