DECEMBER 21, 2004
Ecclestone and the F1 banks
The three banks involved in a dispute with Bernie Ecclestone over the control of the Formula One group have given a hint that they might be willing to compromise and save everyone the time and cost of spending the next few months (and perhaps years) in court. The three banks - Bayerische Landesbank, JP Morgan Chase and Lehman Brothers - had seemingly been intent on continuing their legal actions and taking action to secure damages from Ecclestone because of the loss of value in the company. But now it seems there may be compromise in the wind with Gerhard Gribkowsky, Bayerische Landesbank's first chief risk officer and the man who oversees the F1 situation, suggesting that the banks might be willing to allow Ecclestone to stay on but under their control.
"We would be badly advised if we were to exclude Ecclestone," Gribkowsky told the German media. "Over more than three decades he has established extensive contracts within the industry, sponsors, circuit operators and other involved parties. But there are limits. We will no longer allow ourselves to be pressed into a role in which we carry all the equity risk without saying a word."
Gribkowsky added that the banks were alert to risks that the GPWC might start its own championship and take away all the important F1 teams, leaving the banks and Ecclestone with nothing of value.
"We take the issue very seriously," said Gribkowsky. "I think the market is too small and that a power struggle between the two series would harm both. But I don't think the doors are closed yet.
Gribkowsky said that the banks want to see F1 going to Russia and India and making more of an impact in North America where the sport has a very low profile.
The Bayerische Landesbank has had some serious credit losses in recent years and there are fears that the bank will lose its high credit-rating when it will lose the guarantees from the state of Bavaria in line with a European Union ruling on Landesbanken guarantees which comes into effect in 2005. In expectation of this the bank has revamped its loan structures and has been working hard to get rid of old debts. Formula One is the most important of these and finding a solution to the problem - one way or another - is an important priority.
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