SEPTEMBER 6, 2004
The F1 banks will not sell to Bernie
There may be reports that Bernie Ecclestone is buying back the Formula One group from the banks involved in the company but this does not make the story any more true than Ecclestone's comments suggesting that F1 is boring because the media reports that it is boring.
Our sources say that the Bayerische Landesbank, JP Morgan Chase Bank and Lehmann Brothers, which own 75% of the company, are not going to sell to Ecclestone no matter what the price he offers. The three banks agreed to swap $1.6bn in debt to acquire the shares and are not going to sell it back to Ecclestone for the reported $450m, preferring to fight in the courts to determine who controls the company. There is a case due soon at the High Court in London to decide who has the right to name directors of the SLEC board. If the banks win that case Ecclestone may have to answer to a board dominated by bank nominees, which would make his position very difficult.
We hear that the banks are confident of success and if they can break Ecclestone's hold on decision-making they will then conclude a deal for Formula 1 racing to be run in conjunction with the GPWC organization. Such a deal could be blocked by the FIA as it could be seen to constitute a change of control in SLEC but it is doubtful that the federation would risk such a move, particularly as Max Mosley's hold on power at the FIA is not guaranteed.
A deal between the banks and the GPWC would make it possible for the redistribution of F1 funds and the gradual phasing out of existing deals between the Formula One group and Allsport Management, which would ultimately mean that all F1 income would be centralised and redistributed on a more egalitarian basis.
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