OCTOBER 27, 2004
A rumble on the horizon
The announcement that the GPWC is pushing ahead with plans for its own series in 2008 is not news but the announcement that the company has appointed International Sports and Entertainment AG to "start building immediately the operational and commercial structure for a new open-wheel motor racing series, to begin no later than 2008" is a reminder that the GPWC members BMW, Ferrari, Mercedes-Benz and Renault are serious in their plan.
ISE was founded in early 2003 as a joint venture between Dentsu Inc. and Publicis Groupe S.A., two of the world's leading advertising groups. It combines many years of experience of working with international sports federations and on the world's most prestigious sports events, at every level of commercial activity, including television, sponsorship, licensing, and hospitality. It is already working with FIFA on the World Cup soccer competition in 2006.
The aim is not to set up a rival World Championship as is often reported but rather to have a new structure which Formula 1 can slide into at a later date, either by means of a negotiated settlement with Bernie Ecclestone or as part of a deal with the banks which own 75% of Ecclestone's company and are fighting him for control of the business in the High Court in London.
Ecclestone is busy raising money to pay off the Eurobond that is currently weighing on the F1 business and hopes to be able to buy the banks off and retake full control of the business by 2006 and than face down the challenge from the GPWC but the involvement of Ferrari in the GPWC remains a thorn in his side because the Italian car manufacturer continues to enjoy the image of being the most important element in deciding what constitutes a World Championship. Changing that perception is not going to be easy.
Coincidentally, the hand of Ecclestone can clearly be seen behind the proposals being made by nine of the 10 teams to cut costs in F1, leaving Ferrari isolated and unhappy.
"We have been more than patient with the current management and governance of Formula One, but recent developments have underlined the need for a structure that guarantees a stable and prosperous future of the sport," said Prof. Jurgen Hubbert, former Mercedes-Benz boss and chairman of GPWC Holdings. "GPWC is very satisfied to have secured the services of ISE. Its strong shareholder base and wide-ranging management experience with global sports events such as the FIFA World Cup and the Olympic Games makes ISE our clear partner of choice."
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