MARCH 21, 2001
F1 ownership race set to reach possible conclusion
THIS week could finally see the commercial future of the F1 business finally nailed down at a crucial meeting of the FIA World Motor Sport Council which was due to take place in Paris on Wednesday (21 March).
Bernie Ecclestone, who was quite understandably not at Sepang for the Malaysian Grand Prix, is apparently optimistic that a deal can be cut to smooth the choppy water for the future. It won't be easy. The task facing the sport's administrators involved reconciling the interests of Ecclestone's SLEC organization, two German media groups, the sport's governing body and possibly several of the car makers who are salivating at the prospect of a financial cut in the F1 cake.
For his part, Ecclestone is confident that the theoretical problems posed by German media group Kirch staking its tottering rival EM.TV can be resolved. Although between them they will hold 75 per cent of the shares of the F1 business when the transaction is completed, Bernie is playing down the potential conflict which could arise from the fact that Kirch has the rights to broadcast F1 on its pay-to-view channel - thereby becoming a shareholder as well as a client.
"Kirch has bought some shares in EM.TV" Ecclestone told the SUNDAY TIMES newspaper, "but it has no control over the sport. It is not interested in taking F1 into pay-per-view and it is not in its interest as a shareholder, via EM.TV, to reduce accessibility to the sport."
That's as maybe, but the very threat of a potential clash of interests has led the car makers - who collectively invest around $1 billion in the F1 business annually - to gain a foothold on the shareholder base. This could only be achieved by buying shares from either the German media duo - or from Ecclestone's remaining 25 per cent - on the basis that they'd like Bernie to go on running it for the moment. Later, after his retirement, they would then like to be in a position to control the business in preference to a media group.
"The car manufacturers are negotiating for a stake," said Bernie. "They were not happy, but they are now. I'm sure we can get the manufacturers on board and everybody will be one happy family striving to make F1 even more popular."
The FIA, however, could still veto the passing of control to the new Kirch/EM.TV combine. The governing body's President Max Mosley commented; "We have to be satisfied that the new owner (of the rights) can carry out its obligations to F1. We've had some difficulty in establishing the relationships between Kirch, EM.TV and the (SLEC) trust so we can't discover whether there has been a change of control and whether we're satisfied with the new owner. But we may well be happy."
There is also the question of Ecclestone paying some money outstanding to the FIA for future television rights, although Bernie says that some funds have been transferred to an escrow account in anticipation of a successful meeting in Paris.