JULY 8, 2002
Teams impressed by GPWC proposals
The latest word in the financial markets is that German banks are on the verge of announcing a deal to swap $1.6bn of debts with the Kirch Group for the 75% share in the Formula One holding company SLEC. The banks involved are the state-controlled Bayerische Landesbank, JP Morgan and Lehman Brothers. We hear that a new board for SLEC has been proposed and all the shares involved will be consolidated with the 58.3% stake in SLEC which is owned by Kirch being reunited with the 16.7% stake still owned by EM.TV, which is promised to Kirch. The banks must now go through all the details and then decide what they wish to do with the stake. This is likely to take some time and this is the commodity which Formula 1 does not have at the moment as everyone wants a settlement so that new long-term marketing deals can be struck with sponsors which want to make a long-term commitment. F1 marketing staff are saying that long-term deals are almost impossible to sign at the moment.
If the situation remained blocked the strength of the GPWC will inevitably grow stronger. On Friday the teams were all shown what is called an Organization Agreement which would give the teams a much bigger share of the revenues generated by the sport. The GPWC issued a statement saying that the revenues would include "TV rights, promotion of races, trackside advertising, hospitality, and merchandising."
The presentation was made by Goldman Sachs and the marketing company Spectra.
The statement said that the meeting was "a significant step forward for GPWC and for the GPWC series."
The FIA is remaining above the current wheeling and dealing and is siding with neither SLEC nor the manufacturers.
"The danger is that if they go on talking about it for much longer it will start to interfere with the sponsors," FIA President Max Mosley said at the weekend. "What we are saying is that things must be done quickly."