APRIL 16, 2002
Banks offer manufacturers 30% of SLEC
THE bankers involved in the Kirch business have offered to give the car manufacturers a 30% share in SLEC in an effort to revalue the company. The news was revealed in The Business of Motorsport newsletter, a sister publication to Grandprix.com, and in The Guardian newspaper in London.
The deal would mean that the Grand Prix World Championship NV company would give up its plans to start a rival championship in 2008. The offer is not expected to be enough to convince the automobile manufacturers to do the deal, despite the fact that they will be turning down a stake worth a couple of billion dollars. GPWC is planning to start its own series and will thus get 100% of the income of the new series which at the moment has the support of most of the major teams in F1. The manufacturers may eventually agree to settle but they will want as much as 80% of the business, leaving the remaining 20% to anyone acting as agents on their behalf. This is not an unusual arrangement with the commercial rights sales of sporting federations. In Formula 1, however, the agents (SLEC) takes more than 60% of all the income generated by the sport.
While some think that the manufacturers are bluffing in an effort to squeeze a better deal out of SLEC chief executive Bernie Ecclestone, there are others in F1 who are convinced that the rival championship will happen.
The FIA is currently maintaining a neutral stance but we understand that the GPWC were asked several probing questions by FIA President Max Mosley at Imola, namely how they are going to guarantee teams money for a long-term contract at the same kind of level as currently being paid out by SLEC. This would require guarantees of sums in the region of $2bn.
There is pressure being brought to bear on both parties by the FIA which is reminding everyone that some of F1's sponsors are becoming nervous about the long-term stability of the sport.
|Print News Story|