Bernie offers teams £260m
Formula 1's commercial boss Bernie Ecclestone made an informal offer of a three-year US$500m deal to the ten participating teams if they commit their futures to the sport beyond the current Concorde Agreement, according to reports in the British national press
In the wake of Ecclestone's high-court defeat by the three banks that comprise Speed Investments (Bayerische Landesbank, Lehman Brothers and JP Morgan), which concluded that Ecclestone's trust must relinquish two seats on the board of Formula One Holdings - one of the sport's parent companies, Ecclestone has responded to the threat of a breakaway championship with a renewed offer to the teams. (Click HERE for separate story).
Four of the sport's leading manufacturers BMW, Fiat, Renault and Mercedes are unhappy with the size of the slice of F1's revenue that is shared among the teams, and are pushing ahead with plans to create a breakaway series - the Grand Prix World Championship - in 2008.
Ecclestone also wants to change the way F1's earnings are distributed to the teams according to the current Concorde Agreement (which runs out in 2007), and according to sources this is not thought to be the first financial package that they have been offered. However it's timing is significant with Ecclestone's hold on the sport perceived to have been weakened by the judgement on Monday and the GPWC's resolve seemingly undiminished.
Ecclestone believes that he can ward off the GPWC threat however, which is neither in the banks or Bernie's best interests, with this new £260m team package. If the GPWC was to succeed in creating a breakaway series it would likely drive down the price of the shareholding and the banks are thus likely to support a move to pacify the teams.
"They can have the money from next year if they want," Ecclestone told the Daily Telegraph. "It's a lot of cash and over and above the sums they signed up to in the Concorde Agreement. I think the teams will want to accept it."
The offer would more than double the earnings that the teams generate from competing in the sport, and is believed to be similar to that proposed by Ecclestone a year ago when he signed up to the Memorandum of Understanding with the GPWC - which was supposed to end the dispute.
"The GPWC will have to at least have to match that sum in if the rest of the grid is going to go with them in a breakaway," said Minardi team owner Paul Stoddart. "And that's just the starting bid. I can't see that happening can you?"
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