MARCH 23, 2005
The deal behind a smokescreen
The case in the High Court case between Bayerische Landesbank, JP Morgan and Lehman Brothers and Bernie Ecclestone has been settled - but no-one is talking about the deal. The court case was due to come to court in May but it seems that Ecclestone has somehow managed to get a compromise which suits everyone. The interesting thing is that no-one seems to know what has happened and this would seem to suggest that there is some form of confidentiality agreement involved. It is not clear why this would be necessary but obviously some of those involved do not want the details to be made public. There are several reasons why this might be and it could indicate both a victory or a defeat for either side, so no-one really knows what has happened.
Even those who were in court were left with no indication as to what was happening. The big issue is whether or not there has been a change of control in the ownership of the Formula One Group.
The fact that there is a confidentiality agreement may also indicate that the two parties are working together to protect their asset at a time when the automobile manufacturers in F1 are clearly getting serious. The banks have nothing to gain from trying to win control if at the end of the fight there is nothing left to control but at the same time it is possible that they were getting too close to winning a major victory and so Ecclestone might have compromised. It could be that the banks now have control but have agreed to give it to Ecclestone for a period of time so that he can sort out the problems within the sport. Obviously this would not be something that Bernie would want to be known.
Even the best confidentiality agreements do not hold in all the information involved so we would expect to hear more, although it is possible that the deal (whatever it is) could be cancelled if information did get out. Thus it is quite possible that the months ahead will involve negotiations between Ecclestone and the teams without the teams knowing who they are actually dealing with.
A deal does take away a variable in the whole settlement process and we must assume that henceforth Ecclestone and the banks are working as one.
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