Taking out the banks

The Formula 1 banks have been lurking around the edge of the sport for the last couple of years. They are not interested in the business beyond getting out money which they "invested" in the sport when they acquired the shares of the Formula One group from the assets of the crumbled Kirch media empire. The court case yesterday hinted at a settlement but at the moment few in F1 any idea what settlement is being discussed. The last months have been a little rocky between the banks and their partner Bernie Ecclestone with a series of court cases and some fairly obvious delaying techniques just to convince them that trying to grab the copmpany in the courts could be a lengthy business. The big question is whether Ecclestone is moving in to buy them out, or whether he is settling for a lesser role. It is hard to imagine that he will accept the latter course but at the same time putting his hand into his own pocket (or rather the family trust funds) is not generally the sort of thing one expects to see. However it is worth noting that there were three sets of lawyers at the court yesterday and the implication is that Ecclestone may now be operating as an individual as well as part of the existing business. In other words he is going to buy the shares himself, spending a billion dollars to get rid of the banks. This is sensible in that they are the wild card in the F1 business and if they were to do a deal with someone else Ecclestone's hold on the business would be under threat. For some time it has been believed that the bansk would not do a deal with Ecclestone but in the cynical world of F1 they view is that bankers are bankers and will always go for the money if it is offered. We will see later in the day what develops but anything other than such a deal would have to be viewed as a step backwards for Mr E although if he does get the banks squared away, he will then be in a stronger position as his only opponent would be the automobile manufacturers. If that were to happen we could see some switching of alliances.

Follow grandprixdotcom on Twitter

Print News Story