FEBRUARY 10, 2005
Rumours and realities
There are reports today that Bernie Ecclestone has upped his offer to the Formula 1 teams to as much as 50% of the total income of Formula 1 from 2008 onwards, but the reality is that this offer is much the same as was on the table before when there were previous discussions about money. The teams are in any case not going to decide anything until they hear what the GPWC's package will include. This will be revealed to them next week by iSe, the company which the GPWC has appointed to put together a new series. Ecclestone is also talking about bonus payments for teams which sign up before the end of the current agreement, which is designed to be attractive to teams that are short of money in the short term.
FIA President Max Mosley has been voicing him support for Ecclestone and says that Ecclestone has long-term contracts with the race promoters. This is true but it ought to be pointed out that both sides have obligations under such contracts. Promoters have to pay Ecclestone and he had to deliver them cars. If he does not have bona fide F1 cars, he does not have a contract. Mosley also said that Ecclestone controls the Formula 1 brand. This is partly true although all that is necessary for someone to add TM to the end of an expression is an application for a trademark. The granting of the trademark is a rather more complicated issue. The FIA owns the right to "Formula One", which is not the same as Formula 1. The other point that should be remembered is that the three banks who are partners in the Formula One group are currently challenging Ecclestone for control of the company and so it is not Ecclestone who has the contracts and brands. It is the company. If the banks control the company Ecclestone might end up with very little say in the matter, still less if the banks did a deal with the GPWC and put iSe in control of the commercial side of the business.
The FIA has a clause which might be applied if there was a change of control in the Formula One company but even this would not necessarily work. There would be a strong case that the law suits, which the banks are taking at the moment, are to confirm that they have taken control. It could be argued that the actual change of control occurred when they acquired the shares several years ago - at which point the FIA did nothing to oppose the move.
The battles go on.
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