AUGUST 14, 2000
Selling the sport
FURTHER investigations have revealed that the Formula 1 teams are negotiating with Bernie Ecclestone to buy his remaining shares in SLEC, the holding company of the Formula One group of companies.
Given that several of the teams are now owned by car manufacturers and others have strong links with venture capital companies, it should not be too difficult for the money to be raised, given that such a deal would greatly increase the income available as it would give teams a share of SLEC income which made profits last year of around $270m. Half of this would be an extra $135m for the teams, an income of $10m a year. This is expected to rise in the years ahead as Ecclestone negotiates new deals. The current negotiations are being slowed because teams cannot agree amongst themselves on whether they wish to be involved in the deal and over what will be included in the deal.
This could result in major changes in the F1 line-up because if teams do not want to be involved other organizations could buy into the deal which would create a new system of franchising to replace the current Concorde Agreement. Once it has been established who will be involved in the deal, money will need to be raised and then the deal can go ahead. Given the extra income and the fact that the franchises could later be sold, raising the money should not be too difficult given the current financial situation in F1 with so much interest from merchant banks and car manufacturers.
Ford Motor Company President Jac Nasser attended the Hungarian GP and had a long meeting with Ecclestone but he refused to comment on any talks but he did admit that it makes sense for the companies investing in F1 to get more control of the commercial exploitation of the sport.
Ecclestone himself says that there are currently no plans for his partner EM.TV to sell its 50% shareholding in SLEC, despite the fact that the company has a rather low share price at the moment. EM.TV boss Thomas Haffa is planning to float his shares in the company as soon as possible and is aiming to raise as much as $2bn.